Regulation of gene expression during muscle development and disease remains incompletely understood. microRNAs are a class of small non-coding RNAs that regulate gene expression and function post-transcriptionally. The poly(C)-binding protein1 (Pcbp1, hnRNP-E1, or αCP-1) is an RNA-binding protein that has been reported to bind the 3'-UTRs of target genes to regulate mRNA stability and protein translation. However, Pcbp1's biological function and the general mechanism of action remain largely undetermined. Here, we report that Pcbp1 is a component of the miRNA-processing pathway that regulates miRNA biogenesis. siRNA-based inhibition of Pcbp1 in mouse skeletal muscle myoblasts led to dysregulated cellular proliferation and differentiation. We also found that Pcbp1 null mutant mice exhibit early embryonic lethality, indicating that Pcbp1 is indispensable for embryonic development. Interestingly, hypomorphic Pcbp1 mutant mice displayed defects in muscle growth due to defects in the proliferation and differentiation of myoblastsand muscle satellite cells, in addition to a slow to fast myofibril switch. Moreover, Pcbp1 modulated the processing of muscle-enriched miR-1, miR-133, and miR-206 by physically interacting with argonaute 2 (AGO2) and other miRNA pathway components. Our study, therefore, uncovers the important function of Pcbp1 in skeletal muscle and the microRNA pathway, signifying its potential as a therapeutic target for muscle disease.