The human oncogenic Kaposi's sarcoma-associated herpesvirus (KSHV) expresses a set of ∼20 viral microRNAs (miRNAs). miR-K10a stands out among these miRNAs because its entire stem-loop precursor overlaps the coding sequence for the Kaposin (Kap) A/C proteins. The ectopic expression of KapA has been reported to lead to transformation of rodent fibroblasts. However, these experiments inadvertently also introduced miR-K10a, which raises the question whether the transforming activity of the locus could in fact be due to miR-K10a expression. To answer this question, we have uncoupled miR-K10a and KapA expression. Our experiments revealed that miR-K10a alone transformed cells with an efficiency similar to that when it was coexpressed with KapA. Maintenance of the transformed phenotype was conditional upon continued miR-K10a but not KapA protein expression, consistent with its dependence on miRNA-mediated changes in gene expression. Importantly, miR-K10a taps into an evolutionarily conserved network of miR-142-3p targets, several of which are expressed in 3T3 cells and are also known inhibitors of cellular transformation. In summary, our studies of miR-K10a serve as an example of an unsuspected function of an mRNA whose precursor is embedded within a coding transcript. In addition, our identification of conserved miR-K10a targets that limit transformation will point the way to a better understanding of the role of this miRNA in KSHV-associated tumors. Kaposi's sarcoma-associated herpesvirus (KSHV) is a human tumor virus. The viral Kaposin locus has known oncogenic potential, which has previously been attributed to the encoded KapA protein. Here we show that the virally encoded miR-K10a miRNA, whose precursor overlaps the KapA-coding region, may account for the oncogenic properties of this locus. Our data suggest that miR-K10a mimics the cellular miRNA miR-142-3p and thereby represses several known inhibitors of oncogenic transformation. Our work demonstrates that functional properties attributed to a coding region may in fact be carried out by an embedded noncoding element and sheds light on the functions of viral miR-K10a.