While the global down-regulation of microRNAs (miRNAs) is a common feature of human tumors, its genetic basis is largely undefined. To explore this question, we analyzed the consequences of conditional Dicer1 mutation (Dicer1 “floxed” or Dicer1^fl) on several mouse models of cancer. Here we show Dicer1 functions as a haploinsufficient tumor suppressor gene. Deletion of a single copy of Dicer1 in tumors from Dicer1^fl/+ animals led to reduced survival compared with controls. These tumors exhibited impaired miRNA processing but failed to lose the wild-type Dicer1 allele. Moreover, tumors from Dicer1^fl/fl animals always maintained one functional Dicer1 allele. Consistent with selection against full loss of Dicer1 expression, enforced Dicer1 deletion caused inhibition of tumorigenesis. Analysis of human cancer genome copy number data reveals frequent deletion of DICER1. Importantly, however, the gene has not been reported to undergo homozygous deletion, suggesting that DICER1 is haploinsufficient in human cancer. These findings suggest Dicer1 may be an important haploinsufficient tumor suppressor gene and, furthermore, that other factors controlling miRNA biogenesis may also function in this manner.