MicroRNAs are potent modulators of cellular differentiation. miR-145 is expressed in, and promotes the differentiation of vascular and visceral smooth muscle cells (SMCs). Interestingly, we have observed that miR-145 also promotes differentiation of the gut epithelium in the developing zebrafish, a cell type where it is not expressed. Here we identify that a paracrine pathway involving the morphogens Sonic hedgehog (Shh) in epithelium and bone morphogenic protein 4 (Bmp4) in SMCs is modulated by miR-145. We show that expression of miR-145 in visceral SMCs normally represses the expression of the morphogen bmp4, as loss of miR-145 leads to upregulation of bmp4 in SMCs. We show that bmp4 in turn controls expression of Shh in the visceral epithelium. Conversely, in miR-145 morphants where bmp4 expression is increased, expression of sonic hedgehog a (shha) is strongly increased in gut epithelium. We show that expression of bmp4 is modulated by the miR-145 direct target gata6 but not a second potential direct target, klf5a. Thus although miR-145 is a tissue-restricted microRNA, it plays an essential role in promoting the patterning of both gut layers during gut development via a paracrine mechanism.