Cell proliferation, cell death, and pattern formation are coordinated in animal development. Although many proteins that control cell proliferation and apoptosis have been identified, the means by which these effectors are linked to the patterning machinery remain poorly understood. Here, we report that the bantam gene of Drosophila encodes a 21 nucleotide microRNA that promotes tissue growth. bantam expression is temporally and spatially regulated in response to patterning cues. bantam microRNA simultaneously stimulates cell proliferation and prevents apoptosis. We identify the pro-apoptotic gene hid as a target for regulation by bantam miRNA, providing an explanation for bantam's anti-apoptotic activity.