To identify microRNAs (miRNAs) that may have a causal role in hepatocarcinogenesis, we used an animal model in which C57BL/6 mice fed choline-deficient and amino acid defined (CDAA) diet develop preneoplastic lesions at 65 weeks and hepatocellular carcinomas after 84 weeks. miRNA expression profiling showed significant upregulation of miR-181b and miR-181d in the livers of mice as early as 32 weeks that persisted at preneoplastic stage. The expression of tissue inhibitor of metalloprotease 3 (TIMP3), a tumor suppressor and a validated miR-181 target, was markedly suppressed in the livers of mice fed CDAA diet. Upregulation of hepatic transforming growth factor (TGF) β and its downstream mediators Smad 2, 3 and 4 and increase in phospho-Smad2 in the liver nuclear extract correlated with elevated miR-181b/d in mice fed CDAA diet. The levels of the precursor and mature miR-181b were augmented on exposure of hepatic cells to TGFβ and were significantly reduced by small interference RNA-mediated depletion of Smad4, showing the involvement of TGFβ signaling pathway in miR-181b expression. Ectopic expression and depletion of miR-181b showed that miR-181b enhanced matrix metallopeptidases (MMP) 2 and MMP9 activity and promoted growth, clonogenic survival, migration and invasion of hepatocellular carcinoma (HCC) cells that could be reversed by modulating TIMP3 level. Further, depletion of miR-181b inhibited tumor growth of HCC cells in nude mice. miR-181b also enhanced resistance of HCC cells to the anticancer drug doxorubicin. On the basis of these results, we conclude that upregulation of miR-181b at early stages of feeding CDAA diet promotes hepatocarcinogenesis.