MicroRNAs (miRNAs) comprise a large family of small RNA molecules that post-transcriptionally regulate gene expression in many biological pathways. Most miRNAs are derived from long primary transcripts that undergo processing by Drosha to produce ~65-nucleotide precursors that are then cleaved by Dicer, resulting in the mature 22-nucleotide forms. Serving as guides in Argonaute protein complexes, mature miRNAs use imperfect base pairing to recognize sequences in messenger RNA transcripts, leading to translational repression and destabilization of the target messenger RNAs. Here we show that the miRNA complex also targets and regulates non-coding RNAs that serve as substrates for the miRNA-processing pathway. We found that the Argonaute protein in Caenorhabditis elegans, ALG-1, binds to a specific site at the 3′ end of let-7 miRNA primary transcripts and promotes downstream processing events. This interaction is mediated by mature let-7 miRNA through a conserved complementary site in its own primary transcript, thus creating a positive-feedback loop. We further show that ALG-1 associates with let-7 primary transcripts in nuclear fractions. Argonaute also binds let-7 primary transcripts in human cells, demonstrating that the miRNA pathway targets non-coding RNAs in addition to protein-coding messenger RNAs across species. Moreover, our studies in C. elegans reveal a novel role for Argonaute in promoting biogenesis of a targeted transcript, expanding the functions of the miRNA pathway in gene regulation. This discovery of autoregulation of let-7 biogenesis establishes a new mechanism for controlling miRNA expression.