XPO5 mediates nuclear export of miRNA precursors in a RanGTP-dependent manner. However, XPO5-associated RNA species have not been determined globally and it is unclear whether XPO5 has any additional functions other than nuclear export. Here we show XPO5 pervasively binds to double-stranded RNA regions found in some clustered primary miRNA precursors and many cellular RNAs. Surprisingly, the binding of XPO5 to pri-miRNAs such as mir-17~92 and mir-15b~16-2 and highly structured RNAs such as vault RNAs is RanGTP-independent. Importantly, XPO5 enhances the processing efficiency of pri-mir-19a and mir-15b~16-2 by the DROSHA/DGCR8 microprocessor. Genetic deletion of XPO5 compromises the biogenesis of most miRNAs and leads to severe defects during mouse embryonic development and skin morphogenesis. This study reveals an unexpected function of XPO5 for recognizing and facilitating the nuclear cleavage of clustered pri-miRNAs, identifies numerous cellular RNAs bound by XPO5, and demonstrates physiological functions of XPO5 in mouse development.