Small RNAs are important regulators of gene expression. In maize, adaxial/abaxial (dorsoventral) leaf polarity is established by an abaxial gradient of microRNA166 (miR166), which spatially restricts the expression domain of class III homeodomain leucine zipper (HD-ZIPIII) transcription factors that specify adaxial/upper fate. Here, we show that leafbladeless1 encodes a key component in the trans-acting small interfering RNA (ta-siRNA) biogenesis pathway that acts on the adaxial side of developing leaves and demarcates the domains of hd-zipIII and miR166 accumulation. Our findings indicate that tasiR-ARF, a ta-siRNA, and miR166 establish opposing domains along the adaxial-abaxial axis, thus revealing a novel mechanism of pattern formation.