Viral microRNAs (miRNAs) have been demonstrated to play important roles in virus-host interactions. Some RNA virus-encoded miRNAs have been reported to promote viral replication and may be used as potential drug targets. Bombyx mori cypovirus (BmCPV), an important pathogen of silkworm, is a double-stranded RNA virus frequently causing serious damages in sericulture. Research on miRNA encoded by BmCPV may be useful to elucidate the BmCPV-host interaction and to develop new anti-viral methods. In our previous study, small RNA libraries of the midgut of BmCPV-infected silkworm have been generated by deep sequencing and several BmCPV-encoded putative miRNAs were predicted. In this study, two putative miRNAs encoded by BmCPV were identified and then validated by stem-loop qRT-PCR and northern blot. They are BmCPV-miR-3 encoded by the third genomic RNA segment of BmCPV (478–497bp) and BmCPV-miR-5 encoded by the fifth genomic RNA segment (2481–2500bp), both are 20bp and encoded by ORF regions. miRNA expression could be detected as early as 5h after BmCPV infection, and the expression level of BmCPV-miR-3 is much higher than that of BmCPV-miR-5 in the course of infection. Three potential target genes were predicted in the host genome, two for BmCPV-miR-3 and one for BmCPV-miR-5, but just one in the virus genome for BmCPV-miR-3 only, with the binding sites all in coding regions. Dual luciferase assay and qRT-PCR indicated that BmCPV-miR-3 could down-regulate the expression of both its two target genes, but no regulatory effect by BmCPV-miR-5 on its target gene was detected. In contrast, BmCPV-miR-3 could up-regulate the viral target. This is the first report that an insect double stranded RNA virus may generate miRNAs and the results obtained will benefit the future study of the functions of BmCPV-encoded miRNAs on viral replication and virus-host interaction.