Several different members of the Polyomaviridae, including some human pathogens, encode microRNAs (miRNAs) that lie antisense with respect to the early gene products, the tumor (T) antigens. These miRNAs negatively regulate T antigen expression by directing small interfering RNA (siRNA)-like cleavage of the early transcripts. miRNA mutant viruses of some members of the Polyomaviridae express increased levels of early proteins during lytic infection. However, the importance of miRNA-mediated negative regulation of the T antigens remains uncertain. Bandicoot papillomatosis carcinomatosis virus type 1 (BPCV1) is associated with papillomas and carcinomas in the endangered marsupial the western barred bandicoot (Perameles bougainville). BPCV1 is the founding member of a new group of viruses that remarkably share distinct properties in common with both the polyomavirus and papillomavirus families. Here, we show that BPCV1 encodes, in the same orientation as the papillomavirus-like transcripts, a miRNA located within a long noncoding region (NCR) of the genome. Furthermore, this NCR serves the function of both promoter and template for the primary transcript that gives rise to the miRNA. Unlike the polyomavirus miRNAs, the BPCV1 miRNA is not encoded antisense to the T antigen transcripts but rather lies in a separate, proximal region of the genome. We have mapped the 3' untranslated region (UTR) of the BPCV1 large T antigen early transcript and identified a functional miRNA target site that is imperfectly complementary to the BPCV1 miRNA. Chimeric reporters containing the entire BPCV1 T antigen 3' UTR undergo negative regulation when coexpressed with the BPCV1 miRNA. Notably, the degree of negative regulation observed is equivalent to that of an identical reporter that is engineered to bind to the BPCV1 miRNA with perfect complementarity. We also show that this miRNA and this novel mode of early gene regulation are conserved with the related BPCV2. Finally, papillomatous lesions from a western barred bandicoot express readily detectable levels of this miRNA, stressing its likely importance in vivo. Combined, the alternative mechanisms of negative regulation of T antigen expression between the BPCVs and the polyomaviruses support the importance of miRNA-mediated autoregulation in the life cycles of some divergent polyomaviruses and polyomavirus-like viruses.