microRNAs (miRNA) are small noncoding RNAs that participate in diverse biological processes by suppressing target gene expression. Altered expression of miR-21 has been reported in cancer. To gain insights into its potential role in tumorigenesis, we generated miR-21 knockout colon cancer cells through gene targeting. Unbiased microarray analysis combined with bioinformatics identified cell cycle regulator Cdc25A as a miR-21 target. miR-21 suppressed Cdc25A expression through a defined sequence in its 3'-untranslated region. We found that miR-21 is induced by serum starvation and DNA damage, negatively regulates G(1)-S transition, and participates in DNA damage-induced G(2)-M checkpoint through down-regulation of Cdc25A. In contrast, miR-21 deficiency did not affect apoptosis induced by a variety of commonly used anticancer agents or cell proliferation under normal cell culture conditions. Furthermore, miR-21 was found to be underexpressed in a subset of Cdc25A-overexpressing colon cancers. Our data show a role of miR-21 in modulating cell cycle progression following stress, providing a novel mechanism of Cdc25A regulation and a potential explanation of miR-21 in tumorigenesis.