Rett syndrome (RTT) is a neurodevelopmental disorder caused by mutations in the X-linked gene MECP2. Emerging evidence suggests that MeCP2 is a context-dependent regulator of gene expression, acting as a methylation-dependent transcriptional repressor, transcriptional activator and mRNA splicing regulator. However, direct MeCP2 targets, and the precise molecular mechanisms underlying RTT pathogenesis, remain obscure. We show here that MeCP2 unexpectedly facilitates the post-transcriptional processing of a particular microRNA (miRNA) as a component of the miRNA microprocessor Drosha complex. Surprisingly, introduction of this MeCP2-target miRNA (miR-MeCtgt) into MeCP2-deficient hippocampal neurons restored reduced soma size, excitatory synaptic formation and neurotransmission, which are hallmarks of RTT neuropathology. Moreover, inhibition of endogenous miR-MeCtgt recapitulated the RTT neuronal phenotype and abolished MeCP2 function both in vitro and in vivo, strongly suggesting that miR-MeCtgt acts downstream of MeCP2. We also found that expression of miR-MeCtgt is post-transcriptionally dysregulated in the frontal cortex of RTT individuals. These findings reveal a previously unrecognized function of MeCP2 in facilitation of miRNA processing and suggest that post-transcriptional regulation of miRNA biogenesis is involved in neuronal functions regulated by MeCP2, bringing us closer to understanding how MeCP2 deficiency leads to RTT pathogenesis.