Precise regulatory mechanisms are necessary to properly control the enlargement and patterning of plant lateral organs. However, our understanding of the regulatory modules that govern both of these processes is limited. An emerging theme in plant development is microRNA (miRNA)-mediated gene regulation of transcription factors, including several NAC domain family members such as CUP-SHAPED COTYLEDON2 (CUC2). We uncovered a novel allele of CUC2, cuc2-1D, that revealed important functions of miRNAs and CUC2 in a regulatory module governing lateral organ enlargement and patterning. cuc2-1D carried a single point mutation in the CUC2 miRNA target site, disrupting miRNA targeting. Disruption of the tight balance between CUC2 and its targeting miRNA, miRNA164, led to over-accumulation of CUC2 mRNA and expansion of the CUC2 expression domain. cuc2-1D plants had enlarged vegetative and reproductive lateral organs relative to wild-type plants. Mechanistically, these enlarged organs resulted from an increase in cell proliferation that occurred over a longer developmental time frame relative to wild-type. This organ enlargement was dependent on the receptor-like kinase, ERECTA (ER). This and lateral organ patterning phenotypes in cuc2-1D suggest that miRNA164 and CUC2 are critical regulators of both processes. Therefore, we propose that miRNA164 and CUC2 form a central regulatory module that acts as a governor of lateral organ patterning and expansion.