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Plant microRNAs (miRNAs) have an impact in the regulation of several biological processes such as development, growth and metabolism by negatively controlling gene expression at the post-transcriptional level. However, the role of these small molecules in the medicinal gymnosperm species Taxus remained elusive. To elucidate the role of miRNAs in Taxus we used a deep sequencing approach to analyze the small RNA and degradome sequence tags of Taxus mairei leaves. For miRNAs, the sequencing library generated 14.9 million short sequences, resulting in 13.1 million clean reads. The library contains predominantly small RNAs with 21 nucleotide length, followed by 19-nt and 20-nt small RNAs. Around 29% of total small RNAs are matched to the T. mairei transcriptome. By sequence alignment, we identified 871 mature miRNAs, 15 miRNA* and 869 miRNA precursors representing known plant miRNA families. There are 547 unique small RNA matching the miRNA precursors. We predict 37 candidate novel miRNAs from the unannotated small RNAs that could be mapped to the reference transcriptome. The expression of the selected candidates was for the first time quantified by real-time reverse transcription polymerase chain reaction. The novel miRNA m0034 turns out to be from the intron sequence of the paclitaxel biosynthetic gene taxadiene synthase. The 21 potential targets of nine novel miRNAs are also predicted. Additionally, 56 targets for known miRNA families and 15 targets for novel candidate miRNA families were identified by high-throughput degradome-sequencing approach. It is found that two paclitaxel biosynthetic genes, taxane 13α hydroxylase and taxane 2α-O-benzoyltransferase, are the cleavage targets of miR164 and miR171, respectively. This study represents the first transcriptome-based analysis of miRNAs and degradome in gymnosperms.