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Rhizoctonia solani AG1-1A is a necrotrophic fungus that causes sheath blight disease in rice. The reliable resistant source against this phytopathogenic fungus is not available in the gene pool of rice. Better understanding of pathogen genomics and gene regulatory networks are critical to devise alternate strategies for developing resistance against this noxious pathogen. In this study, miRNA-like RNAs (milRNAs) of an Indian strain of R. solani were identified by deep sequencing of small RNAs. We identified 128 known and 22 novel milRNAs from 20,963,123 sequence reads. These milRNAs showed 1725 target genes in the fungal genome which include genes associated with growth, development, pathogenesis and virulence of R. solani. Notably, these fungal milRNAs showed their target genes in host (rice) genome also which were later verified by qRT-PCR. The host target genes are associated with auxin metabolism, hypersensitive response, defense genes, and genes related to growth and development of rice. Osa-vacuolar-sorting receptor precursor: Rhi-milR-13, Osa-KANADI1:Rhi-milR-124, Osa-isoflavone reductase: Rhi-milR-135, Osa-nuclear transcription factor Y:Rhi-milR-131, Osa-NB-ARC domain containing protein: Rhi-milR-18, and Osa-OsFBX438: Rhi-milR-142 are notable potential regulons of host target genes: fungal milRNAs that need to be investigated for better understanding of the crosstalk of RNAi pathways between R. solani and rice. The detailed expression analysis of 17 milRNAs by qRT-PCR was analysed during infection at different time points of inoculation, at different growth stages of the host, in four different genotypes of the host, and also in four different strains of fungi which revealed differential regulation of milRNAs associated with pathogenesis and virulence. This study highlights several important findings on fungal milRNAs which need to be further studied and characterized to decipher the gene expression and regulation of this economically important phytopathogen.