α-fetoprotein (AFP) is not only a widely used biomarker in hepatocellular carcinoma (HCC) surveillance, but is also clinically recognized as linked with aggressive tumour behaviour. Here we show that deregulation of microRNA122, a liver-specific microRNA, is a cause of both AFP elevation and a more biologically aggressive phenotype in HCC. We identify CUX1, a direct target of microRNA122, as a common central mediator of these two effects. Using liver tissues from transgenic mice in which microRNA122 is functionally silenced, an orthotopic xenograft tumour model, and human clinical samples, we further demonstrate that a microRNA122/CUX1/microRNA214/ZBTB20 pathway regulates AFP expression. We also show that the microRNA122/CUX1/RhoA pathway regulates the aggressive characteristics of tumours. We conclude that microRNA122 and associated signalling proteins may represent viable therapeutic targets, and that serum AFP levels in HCC patients may be a surrogate marker for deregulated intracellular microRNA122 signalling pathways in HCC tissues.