Members of the miR-290 family are the most abundantly expressed microRNAs (miRNAs) in mouse embryonic stem cells (ESCs). They regulate aspects of differentiation, pluripotency, and proliferation of ESCs, but the molecular program that they control has not been fully delineated. In the absence of Dicer, ESCs fail to express mature miR-290 miRNAs and have selective aberrant overexpression of Hoxa, Hoxb, Hoxc, and Hoxd genes essential for body plan patterning during embryogenesis, but they do not undergo a full differentiation program. Introduction of mature miR-291 into DCR−/− ESCs restores Hox gene silencing. This was attributed to the unexpected regulation of Polycomb-mediated gene targeting by miR-291. We identified the methyltransferase Ash1l as a pivotal target of miR-291 mediating this effect. Collectively, our data shed light on the role of Dicer in ESC homeostasis by revealing a facet of molecular regulation by the miR-290 family. •Silencing of Hox genes in ESCs is defective in the absence of Dicer•A member of the miR-290 family is sufficient to rescue the Hox gene-silencing defect•There is widespread Polycomb deregulation in Dicer-deficient ESCs•miR-290 can restore Polycomb localization by regulating Ash1l Muljo, Lenardo, and colleagues find that in Dicer-deficient mouse embryonic stem cells (mESCs), there is reduced Polycomb Repressive Complex 2 binding and increased gene expression at many loci, including the Hoxa–Hoxd gene cluster. These defects in mESC-fate programming can be rescued by the miR-290 family and to a lesser extent by knockdown of Ash1l, a putative target of miR-290.