MicroRNAs (miRNAs) are essential regulators of development, physiology, and evolution, and their biogenesis is strictly controlled at multiple levels. Regulatory proteins, such as KSRP, modulate rates and timing of enzymatic reactions responsible for maturation of select miRNAs from their primary transcripts in response to specific stimuli. Here, we show that KSRP silencing in mesenchymal C2C12 cells produces a change in the transcriptome largely overlapping that induced by bone morphogenetic protein 2 (BMP2) signaling activation. This induces osteoblastic differentiation while preventing myogenic differentiation. KSRP silencing- and BMP2-dependent myogenic miRNA (myomiR) maturation blockade is required for osteoblastic differentiation of C2C12 cells. Our results demonstrate that phosphorylated R-SMAD proteins, the transducers of BMP2 signal, associate with phosphorylated KSRP and block its interaction with primary myomiRs. This abrogates KSRP-dependent myomiR maturation, with SMAD4, SMAD5, and SMAD9 silencing being able to rescue KSRP function. Thus, SMAD-induced blockade of KSRP-dependent myomiR maturation is critical for orienting C2C12 cell differentiation toward osteoblastic lineage. Copyright © 2012 The Authors. Published by Elsevier Inc. All rights reserved.