MicroRNAs (miRNAs) have been shown to play key regulatory roles in a range of biological processes, including cell differentiation and development. To identify miRNAs that participate in gonad differentiation, a fundamental and tightly regulated developmental process, we examined miRNA expression profiles at the time of sex determination and during the early fetal differentiation of mouse testes and ovaries using high-throughput sequencing. We identified several miRNAs that were expressed in a sexually dimorphic pattern, including several members of the let-7 family, miR-378, and miR-140-3p. We focused our analysis on the most highly expressed, sexually dimorphic miRNA, miR-140-3p, and found that both miR-140-3p and its more lowly expressed counterpart, the previously annotated guide strand, miR-140-5p, are testis enriched and expressed in testis cords. Analysis of the miR-140-5p/miR-140-3p-null mouse revealed a significant increase in the number of Leydig cells in the developing XY gonad, strongly suggesting an important role for miR-140-5p/miR-140-3p in testis differentiation in mouse.