MicroRNAs (miRNAs) are small regulatory RNAs produced by Dicer proteins that regulate gene expression in development and adaptive responses to the environment1-4. In animals, the degree of base pairing between a miRNA and its target messenger RNA seems to determine whether the regulation occurs through cleavage or translation inhibition1. In contrast, the selection of regulatory mechanisms is independent of the degree of mismatch between a plant miRNA and its target transcript5. However, the components and mechanism(s) that determine whether a plant miRNA ultimately regulates its targets by guiding cleavage or translational inhibition are unknown6. Here we show that the form of regulatory action directed by a plant miRNA is determined by DRB2, a DICER-LIKE1 (DCL1) partnering protein. The dependence of DCL1 on DRB1 for miRNA biogenesis is well characterized7-9, but we show that it is only required for miRNA-guided transcript cleavage. We found that DRB2 determines miRNA-guided translational inhibition and represses DRB1 expression, thereby allowing the active selection of miRNA regulatory action. Furthermore, our results reveal that the core silencing proteins ARGONAUTE1 (AGO1) and SERRATE (SE) are highly regulated by miRNA-guided translational inhibition. DRB2 has been remarkably conserved throughout plant evolution, raising the possibility that translational repression is the ancient form of miRNA-directed gene regulation in plants, and that Dicer partnering proteins, such as human TRBP, might play a similar role in other eukaryotic systems.