Abstract Background Caenorhabditis elegans seam cells serve as a good model to understand how genes and signaling pathways interact to control asymmetric cell fates. The stage-specific pattern of seam cell division is coordinated by a genetic network that includes WNT asymmetry pathway components WRM-1, LIT-1, and POP-1, as well as heterochronic microRNA (miRNAs) and their downstream targets. Mutations in pry-1, a negative regulator of WNT signaling that belongs to the Axin family, were shown to cause seam cell defects; however, the mechanism of PRY-1 action and its interactions with miRNAs remain unclear. Results We found that pry-1 mutants in C. elegans exhibit seam cell, cuticle, and alae defects. To examine this further, a miRNA transcriptome analysis was carried out, which showed that let-7 (miR-48, miR-84, miR-241) and lin-4 (lin-4, miR-237) family members were upregulated in the absence of pry-1 function. Similar phenotypes and patterns of miRNA overexpression were also observed in C. briggsae pry-1 mutants, a species that is closely related to C. elegans. RNA interference-mediated silencing of wrm-1 and lit-1 in the C. elegans pry-1 mutants rescued the seam cell defect, whereas pop-1 silencing enhanced the phenotype, suggesting that all three proteins are likely important for PRY-1 function in seam cells. We also found that these miRNAs were overexpressed in pop-1 hypomorphic animals, suggesting that PRY-1 may be required for POP-1-mediated miRNA suppression. Analysis of the let-7 and lin-4-family heterochronic targets lin-28 and hbl-1 showed that both genes were significantly downregulated in pry-1 mutants, and furthermore, lin-28 silencing reduced the number of seam cells in mutant animals. Conclusions Our results show that PRY-1 plays a conserved role to maintain normal expression of heterochronic miRNAs in nematodes. Furthermore, we demonstrated that PRY-1 acts upstream of the WNT asymmetry pathway components WRM-1, LIT-1, and POP-1, and miRNA target genes in seam cell development.