It is widely believed that functional mammalian microRNA (miRNA) recognition sequences are located preferentially in the 3' untranslated region (3'UTR) of target mRNAs. Nonetheless, putative miRNA target sites within coding regions have been found at lower frequency in genome-wide studies, and several have been genetically validated. To account for these findings, it has been proposed that translation may inhibit miRNA access to target sites. Here we identify a naturally occurring viral miRNA target that, owing to the compact nature of the viral transcriptome, is situated naturally in the coding region of one transcript and in the 3'UTR of an overlapping mRNA. Examination of the expression of these mRNAs reveals that the cognate miRNA can inhibit expression in both contexts, but inhibition is more potent when the target site is in the UTR. Similarly, forced translation of the target site in the UTR diminished, but did not abolish, its down-regulation by the miRNA. These data affirm that miRNAs can exert regulatory effects on targets within coding regions; however, the dampening of these effects by translation likely accounts for the observed selection for target sites in the 3'UTRs.