Malignant peripheral nerve sheath tumors (MPNSTs) are highly aggressive soft tissue sarcomas accounting for 3%-10% of all soft tissue sarcomas. Neurofibromatosis type 1 (NF1) is the most important known risk factor. MPNSTs are often diagnosed at an advanced stage when distant metastases have developed. Although surgical resection remains the main treatment for MPNSTs, complete surgical resection is rarely possible. The prognosis for patients with MPNSTs is poor. There is an urgent need for improved therapies. To this end, we investigated whether microRNA (miR), specifically miR-204, might be implicated in MPNSTs because it is located at a cancer-associated genomic region exhibiting high frequency of loss of heterozygosity in tumors. We show that miR-204 expression is downregulated in NF1 and non-NF1 MPNST tumor tissues and in tumor cell lines. Restoring miR-204 expression in MPNST cell lines STS26T (non-NF1), ST88-14 (NF1), and T265p21 (NF1) significantly reduces cellular proliferation, migration, and invasion in vitro. Restoring miR-204 expression in STS26T decreases tumor growth and malignant progression in vivo. We also report that miR-204 inhibits Ras signaling and expression of high mobility group gene A2. These findings support the hypothesis that miR-204 plays critical roles in MPNST development and tumor progression. miR-204 may represent a novel biomarker for diagnosis and a candidate target with which to develop effective therapies for MPNSTs.