Numerous microRNAs (miRNAs) have been discovered in the genomes of higher eukaryotes, and functional studies indicate that they are important during development. However, little is known concerning the function of individual miRNAs. We approached this problem in zebrafish by combining identification of miRNA expression, functional analyses and experimental validation of potential targets. We show that miR-214 is expressed during early segmentation stages in somites and that varying its expression alters the expression of genes regulated by Hedgehog signaling. Inhibition of miR-214 results in a reduction or loss of slow-muscle cell types. We show that su(fu) mRNA, encoding a negative regulator of Hedgehog signaling, is targeted by miR-214. Through regulation of su(fu), miR-214 enables precise specification of muscle cell types by sharpening cellular responses to Hedgehog.