MicroRNAs (miRNAs) are a class of noncoding small RNAs that act as negative regulators of gene expression. To identify miRNAs that may regulate human cell immortalization and carcinogenesis, we performed comparative miRNA array profiling of human normal and SV40-T antigen immortalized cells. We found that miR-296 was upregulated in immortalized cells that also had activation of telomerase. By an independent experiment on genomic analysis of cancer cells we found that chromosome region (20q13.32), where miR-296 is located, was amplified in 28/36 cell lines, and most of these showed enriched miR-296 expression. Overexpression of miR-296 in human cancer cells, with and without telomerase activity, had no effect on their telomerase function. Instead, it suppressed p53 function that is frequently downregulated during human cell immortalization and carcinogenesis. By monitoring the activity of a luciferase reporter connected to p53 and p21(WAF1) (p21) untranslated regions (UTRs), we demonstrate that miR-296 interacts with the p21-3'UTR, and the Hu binding site of p21-3'UTR was identified as a potential miR-296 target site. We demonstrate for the first time that miR-296 is frequently upregulated during immortalization of human cells and contributes to carcinogenesis by downregulation of p53-p21(WAF1) pathway.