Key regulators of 3' untranslated regions (3' UTRs) are microRNAs and RNA-binding proteins (RBPs). The p27 tumour suppressor is highly expressed in quiescent cells, and its downregulation is required for cell cycle entry after growth factor stimulation. Intriguingly, p27 accumulates in quiescent cells despite high levels of its inhibitors miR-221 and miR-222 (Refs 5, 6). Here we show that miR-221 and miR-222 are underactive towards p27-3' UTR in quiescent cells, as a result of target site hindrance. Pumilio-1 (PUM1) is a ubiquitously expressed RBP that was shown to interact with p27-3' UTR. In response to growth factor stimulation, PUM1 is upregulated and phosphorylated for optimal induction of its RNA-binding activity towards the p27-3' UTR. PUM1 binding induces a local change in RNA structure that favours association with miR-221 and miR-222, efficient suppression of p27 expression, and rapid entry to the cell cycle. We have therefore uncovered a novel RBP-induced structural switch modulating microRNA-mediated gene expression regulation.