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DICER is a central regulator of microRNA maturation. However, little is known about mechanisms regulating its expression in development or disease. While profiling miRNA expression in differentiating melanocytes, two populations were observed: some upregulated at the pre-miRNA stage, and others upregulated as mature miRNAs (with stable pre-miRNA levels). Conversion of pre-miRNAs to fully processed miRNAs appeared to be dependent upon stimulation of DICER expression--an event found to occur via direct transcriptional targeting of DICER by the melanocyte master transcriptional regulator MITF. MITF binds and activates a conserved regulatory element upstream of DICER's transcriptional start site upon melanocyte differentiation. Targeted KO of DICER is lethal to melanocytes, at least partly via DICER-dependent processing of the pre-miRNA-17 approximately 92 cluster thus targeting BIM, a known proapoptotic regulator of melanocyte survival. These observations highlight a central mechanism underlying lineage-specific miRNA regulation which could exist for other cell types during development.