Hox transcription factors are key determinants of antero-posterior identity and have been implicated in assigning positionally appropriate neuron subtypes in the neural tube. These roles inherently necessitate stringent control mechanisms that confine Hox protein activities to discrete spatiotemporal domains. Here, we provide evidence that the timing and rostro-caudal extent of Hoxb8 activity in the neural tube is tightly regulated by miR-196, a microRNA species encoded within three Hox gene clusters. In vitro and in vivo sensor-tracer analysis and transcription assays revealed that miR-196 activity restricts the caudal extent of Hoxb8 expression to the thoracic-lumbar intersect via 3' UTR-dependent negative regulation. Spatio-temporally inappropriate Hoxb8 activity, through relief of miR-196-mediated repression or direct misexpression, affected normal progression of motor neuron genesis by affecting generic motor neuron differentiation programs. In addition to uncovering a role for microRNA-dependent restriction of caudal Hox activities, these data thus indicate novel aspects of Hox-dependent neural tube patterning by revealing a requirement of temporal regulation of a generic neuronal specification program.