MicroRNAs (miRNAs) are increasingly recognised as important down-regulators of gene expression in health and disease. Luciferase-based transfection assays are commonly used for identifying miRNA targets but these assays have limitations. We report miRNA target identification using a novel functional miRNA targeting assay. The 3′ UTR of the human inward rectifier K+ channel Kir2.1 was inserted downstream of the mCherry red fluorescent protein coding sequence in a mammalian expression plasmid. MiRNA or non-targeting control (SCR) sequences were inserted into the pSM30 miRNA expression vector. Expression of enhanced green fluorescent protein is an indicator of miRNA expression in this system [1]. HEK293 cells were co-transfected with the mCherry-Kir2.1 3′ UTR plasmid and a pSM30-based plasmid with miRNA insert. Alternatively the pSM30-based plasmids were transfected into cells stably expressing the mCherry- Kir2.1 3′ UTR construct. The principle of the assay is that functional targeting of the 3′ UTR by the miRNA results in a decrease in the cell red/green fluorescence intensity ratio as determined by automated image analysis (Volocity or CellProfiler). The method was validated with miR-1, a known down-regulator of Kir2.1 expression, and used to investigate targeting of the Kir2.1 3′ UTR by miR-212, as predicted by the TargetScan and MiRanda algorithms. MiR-212 is markedly up-regulated in heart failure [2] and chronic alcoholism [3], both of which feature down-regulation of inward rectifier K+ channel activity in their pathophysiology [4, 5]; and the affected tissues are known to express Kir2.1. Red/green ratio was significantly lower in miR-1-expressing and miR-212-expressing cells compared to non-targeting controls (miR-1 0.50 ± 0.012 (mean ± sem), n = 776; miR-212 0.72 ± 0.024, n = 550; SCR 1.21 ± 0.025, n = 731; p<.001 for miR-1 vs SCR and miR-212 vs SCR, one-way ANOVA on log-transformed data). The effect of miR-212 was attenuated by mutating the predicted target site (% inhibition 58.0 ± 14.51, n = 3 wild-type; 22.7 ± 1.25, n = 3 mutant; p<.05, t-test on log-transformed data). This novel assay has several advantages over traditional luciferase-based assays including larger sample size, amenability to time course studies; and adaptability to high-throughput screening.