Hundreds of microRNAs (miRNAs) have been discovered in metazoans and plants, and understanding of their biogenesis has advanced dramatically; however, relatively little is known about the cofactors necessary for miRNA regulation of target gene expression. In Caenorhabditis elegans, the conserved miRNA let-7 and its paralogs, including mir-84, control the timing of stage-specific developmental events. To identify factors required for the activity of mir-84 and possibly other miRNAs, we screened for mutations that suppress the developmental defects caused by overexpression of mir-84. Mutations in the somi-1 gene prevent these defects without affecting the expression level of mir-84. Loss of somi-1 also causes phenotypes similar to deletion of mir-84, showing that somi-1 is necessary for the normal function of this miRNA. somi-1 encodes a zinc finger protein that localizes to nuclear foci and binds the promoters of let-60/RAS, lin-14, and lin-28, genes that may be targeted by mir-84 and similar miRNAs. Genetic evidence shows that somi-1 inhibits lin-14 and induction of the vulval precursors by the let-60/RAS pathway. Proteomic and genetic screens identified conserved chromatin-remodeling and homeodomain transcription factor complexes that work with somi-1 to regulate differentiation. Our results suggest that somi-1 coordinates a nuclear response that complements the activity of mir-84.