Wolbachia is a genus of endosymbiotic bacteria that induce a wide range of effects on their insect hosts. Cytoplasmic incompatibility (CI) is the most common phenotype mediated by Wolbachia and results in embryonic lethality when Wolbachia-infected males mate with uninfected females. Studies have revealed that bacteria can regulate many cellular processes in their hosts using small non-coding RNAs, so we investigated the involvement of small RNAs (sRNAs) in CI. Comparison of sRNA libraries between Wolbachia-infected and uninfected Drosophila melanogaster testes revealed 18 novel microRNAs (miRNAs), of which 12 were expressed specifically in Wolbachia-infected flies and one specifically in Wolbachia-uninfected flies. Furthermore, ten miRNAs showed differential expression, with four upregulated and six downregulated in Wolbachia-infected flies. Of the upregulated miRNAs, nov-miR-12 exhibited the highest upregulation in the testes of D. melanogaster. We then identified pipsqueak (psq) as the target gene of nov-miR-12 with the greatest complementarity in its 3' untranslated region (UTR). Wolbachia infection was correlated with reduced psq expression in D. melanogaster, and luciferase assays demonstrated that nov-miR-12 could downregulate psq through binding to its 3'UTR region. Knockdown of psq in Wolbachia-free fly testes significantly reduced egg hatching rate and mimicked the cellular abnormalities of Wolbachia-induced CI in embryos, including asynchronous nuclear division, chromatin bridging, and chromatin fragmentation. These results suggest that Wolbachia may induce CI in insect hosts by miRNA-mediated changes in host gene expression. Moreover, these findings reveal a potential molecular strategy for elucidating the complex interactions between endosymbionts and their insect hosts, such as Wolbachia-driven CI.