Terminal differentiation of distinct cell types requires the transcriptional activation of differentiation-specific genes and the suppression of genes associated with the precursor cell. For example, the expression of utrophin (Utrn) is suppressed during skeletal muscle differentiation, and it is replaced at the sarcolemma by the related dystrophin protein. The MyoD transcription factor directly activates the expression of a large number of skeletal muscle genes, but also suppresses the expression of many genes. To characterize a mechanism of MyoD-mediated suppression of gene expression, we investigated two genes that are suppressed in fibroblasts converted to skeletal muscle by MyoD, follistatin-like 1 (Fstl1) and Utrn. MyoD directly activates the expression of a muscle-specific microRNA (miRNA), miR-206, which targets sequences in the Fstl1 and Utrn RNA, and these sequences are sufficient to suppress gene expression in the presence of miR-206. These findings demonstrate that MyoD, in addition to activating muscle-specific genes, induces miRNAs that repress gene expression during skeletal muscle differentiation.