MicroRNAs (miRNA) are a class of small RNA molecules that regulate numerous critical cellular processes and bind to partially complementary sequences resulting in down-regulation of their target genes. Due to the incomplete homology of the miRNA to its target site identification of miRNA target genes is difficult and currently based on computational algorithms predicting large numbers of potential targets for a given miRNA. To enable the identification of biologically relevant miRNA targets, we describe a novel functional assay based on a 3'-UTR-enriched library and a positive/negative selection strategy. As proof of principle we have used mir-130a and its validated target MAFB to test this strategy. Identification of MAFB and five additional targets and their subsequent confirmation as mir-130a targets by western blot analysis and knockdown experiments validates this strategy for the functional identification of miRNA targets.