Animal development is remarkably robust; cell fates are specified with spatial and temporal precision despite physiological and environmental contingencies. Favorable conditions cause Caenorhabditis elegans to develop rapidly through four larval stages (L1–L4) to the reproductive adult. In unfavorable conditions, L2 larvae can enter the developmentally quiescent, stress-resistant dauer larva stage, enabling them to survive for prolonged periods before completing development. A specific progression of cell division and differentiation events occurs with fidelity during the larval stages, regardless of whether an animal undergoes continuous or dauer-interrupted development. The temporal patterning of developmental events is controlled by the heterochronic genes, whose products include microRNAs (miRNAs) and regulatory proteins. One of these proteins, the DAF-12 nuclear hormone receptor, modulates the transcription of certain let-7-family miRNAs, and also mediates the choice between the continuous vs. dauer-interrupted life history. Here, we report a complex feedback loop between DAF-12 and the let-7-family miRNAs involving both the repression of DAF-12 by let-7-family miRNAs and the ligand-modulated transcriptional activation and repression of the let-7-Fam miRNAs by DAF-12. We propose that this feedback loop functions to ensure robustness of cell fate decisions and to coordinate cell fate with developmental arrest.