Legumes root nodules convert atmospheric nitrogen gas (N₂) into ammonium through symbiosis with a prokaryotic microsymbiont broadly called ‘rhizobia’. Auxin signaling is required for determinant nodule development; however, the molecular mechanism of auxin-mediated nodule formation remains largely unknown. Here we show in soybean (Glycine max L. Merr) that microRNA (miRNA) miR167 acts as a positive regulator of lateral root organs, namely nodules and lateral roots. miR167c expression was up-regulated in the vasculature, pericycle and cortex of soybean roots following inoculation with Bradyrhizobium japonicum strain USDA110 (the microsymbiont). It was found to positively regulate nodule numbers directly by repressing the target genes GmARF8a and GmARF8b (homologous genes of Arabidopsis AtARF8 that encode auxin response factors). Moreover, the expression of miR167 and its targets were up- or down-regulated by auxin, respectively. The miR167-GmARF8 module also positively regulated nodulation efficiency under low microsymbiont density, a condition often associated with environmental stress. The regulatory role of miR167 on nodule initiation was dependent on the Nod factor receptor GmNFR1α, and it acts upstream of the nodulation-associated genes GmNIN, GmNSP1, GmENOD40-1, GmHAP2-1 and GmHAP2-2. miR167 also promoted lateral root numbers. Collectively, our findings establish a key role for the miR167-GmARF8 module in auxin-mediated nodule and lateral root formation in soybean.