Dicer processes microRNAs (miRs) into active forms in a wide variety of tissues including the liver. To determine the role of Dicer in liver regeneration, we performed a series of in vivo and in vitro studies in a murine 2/3 hepatectomy model. Dicer was downregulated after 2/3 hepatectomy, and loss of Dicer inhibited liver regeneration associated with decreased cyclin A2 and miR-221, and increased levels of the cell cycle inhibitor p27. In vitro, miR-221 inhibited p27 production in primary hepatocytes and increased hepatocyte proliferation. Specific reconstitution of miR-221 in hepatocyte-specific Dicer null mice inhibited p27 and restored liver regeneration. In wild type mice, targeted inhibition of miR-221 using a cholesterol-conjugated anti-miR-221 inhibited hepatocyte proliferation after 2/3 hepatectomy. These results identify Dicer production of miR-221 as an essential component of a miRNA-dependent mechanism for suppression of p27 that controls the rate of hepatocyte proliferation after partial hepatectomy.