Non-essential heavy metal cadmium (Cd) is toxic to plants and animals. Cadmium affects plant photosynthesis, respiration, and causes water imbalance and may lead to plant death. Cadmium induces toxicity by interfering with the essential metal copper (Cu) homeostasis, which affects plant nutrition. Though root lignin biosynthesis is positively regulated by Cd stress, the underlying mechanisms promoting lignin accumulation and controlling Cd-induced Cu limitation responses are unclear. Here, we elucidated the role of Cu-responsive microRNA (miR397b) in Arabidopsis thaliana plants for Cd stress by targeting the LACCASE2 (LAC2) gene. This study demonstrated the fundamental mechanism of miR397b-mediated Cd stress response by enhancing the lignin content in root tissues. We developed miR397b over-expressing plants, which showed considerable Cd stress tolerance. Plants with knockdown function of LAC2 also showed significant tolerance to Cd stress. miR397b overexpressing and lac2 mutant plants showed root reduction, higher biomass and chlorophyll content, and significantly lower Reactive Oxygen Species (ROS). This study demonstrated the miR397b-mediated Cd stress response in Arabidopsis by enhancing the lignin content in root tissues. We conclude that modulation in miR397b can be potentially used for improving plants for Cd tolerance and Cu homeostasis.