Cellular differentiation in the gut is vital in maintaining the cellular and functional specialization of the epithelial layer. MicroRNAs (miRNAs) have recently emerged as one of the key players in orchestrating the differentiation process in the gut. Using the spontaneously differentiating Caco-2 cell line, we observed an increased expression of miR-146a but not miR-146b in the course of differentiation. Bioinformatic analyses revealed that the membrane type matrix metalloprotease 16 (MMP16, MT3-MMP) was a predicted target of miR-146a and a decrease in the mRNA and protein expression of MMP16 was observed in the course of differentiation. Transfection of a luciferase reporter vector containing the 3′UTR of MMP16 showed decreased luciferase activity due to miR-146a expression. With forced expression of miR-146a in undifferentiated Caco-2 cells, a decrease in the mRNA and protein levels of MMP16 and a lower gelatinase activity in a gelatin zymogram were observed. Additionally, forced expression of miR-146a in HT-29 colon cancer cells also resulted in decreased expression of MMP16, along with a decrease in the invasion through Matrigel. Taken together, we have shown here that MMP16 is regulated by miR-146a in spontaneously differentiated Caco-2 cells. As MMP16 activates the zymogen of MMP2, which is known to degrade extracellular matrix proteins, the regulation of MMP16 by miR-146a may account, at least in part, for lower motility of well-differentiated cells.