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Spinal Muscular Atrophy (SMA) is caused by diminished Survival of Motor Neuron (SMN) protein, leading to neuromuscular junction (NMJ) dysfunction and spinal motor neuron (MN) loss. Here, we report that reduced SMN function impacts the action of a pertinent microRNA and its mRNA target in MNs. Loss of the C. elegans SMN ortholog, SMN-1, causes NMJ defects. We found that increased levels of the C. elegans Gemin3 ortholog, MEL-46, ameliorates these defects. Increased MEL-46 levels also restored perturbed microRNA (miR-2) function in smn-1(lf) animals. We determined that miR-2 regulates expression of the C. elegans M2 muscarinic receptor (m2R) ortholog, GAR-2. GAR-2 loss ameliorated smn-1(lf) and mel-46(lf) synaptic defects. In an SMA mouse model, m2R levels were increased and pharmacological inhibition of m2R rescued MN process defects. Collectively, these results suggest decreased SMN leads to defective microRNA function via MEL-46 misregulation, followed by increased m2R expression, and neuronal dysfunction in SMA.