The paternally expressed imprinted retrotransposon-like 1 (Rtl1) is a retrotransposon-derived gene that has evolved a function in eutherian placentation. Seven miRNAs, including miR-127, are processed from a maternally expressed antisense Rtl1 transcript (Rtl1as) and regulate Rtl1 levels through RNAi-mediated post-transcriptional degradation. To determine the relative functional role of Rtl1as miRNAs in Rtl1 dosage, we generated a mouse specifically deleted for miR-127. The miR-127 knockout mice exhibit placentomegaly with specific defects within the labyrinthine zone involved in maternal-fetal nutrient transfer. Although fetal weight is unaltered, specific Rtl1 transcripts and protein levels are increased in both the fetus and placenta. Phenotypic analysis of single (ΔmiR-127/Rtl1 or miR-127/ΔRtl1) and double (ΔmiR-127/ΔRtl1) heterozygous miR-127- and Rtl1-deficient mice indicate that Rtl1 is the main target gene of miR-127 in placental development. Our results demonstrate that miR-127 is an essential regulator of Rtl1, mediated by a trans-homologue interaction between reciprocally imprinted genes on the maternally and paternally inherited chromosomes.