During development, tissue-specific transcription factors regulate both protein-coding and non-coding genes to control differentiation. Recent studies have established a dual role for the transcription factor Pax6 as both an activator and repressor of gene expression in the eye, central nervous system, and pancreas. However, the molecular mechanism underlying the inhibitory activity of Pax6 is not fully understood. Here, we reveal that Trpm3 and the intronic microRNA gene miR-204 are co-regulated by Pax6 during eye development. miR-204 is probably the best known microRNA to function as a negative modulator of gene expression during eye development in vertebrates. Analysis of genes altered in mouse Pax6 mutants during lens development revealed significant over-representation of miR-204 targets among the genes up-regulated in the Pax6 mutant lens. A number of new targets of miR-204 were revealed, among them Sox11, a member of the SoxC family of pro-neuronal transcription factors, and an important regulator of eye development. Expression of Trpm/miR-204 and a few of its targets are also Pax6-dependent in medaka fish eyes. Collectively, this study identifies a novel evolutionarily conserved mechanism by which Pax6 controls the down-regulation of multiple genes through direct up-regulation of miR-204.