MtHAP2-1 is a CCAAT-binding transcription factor from the model legume Medicago truncatula. We previously showed that MtHAP2-1 expression is regulated both spatially and temporally by microRNA169. Here we present a novel regulatory mechanism controlling MtHAP2-1 expression. Alternative splicing of an intron in the MtHAP2-1 5'leader sequence (LS) becomes predominant during the development of root nodules, leading to the production of a small peptide, uORF1p. Our results indicate that binding of uORF1p to MtHAP2-1 5'LS mRNA leads to reduced accumulation of the MtHAP2-1 transcript and may contribute to spatial restriction of MtHAP2-1 expression within the nodule. We propose that miR169 and uORF1p play essential, sequential, and nonredundant roles in regulating MtHAP2-1 expression. Importantly, in contrast to previously described cis-acting uORFs, uORF1p is able to act in trans to down-regulate gene expression. Our work thus contributes to a better understanding of the action of upstream ORFs (uORFs) in the regulation of gene expression.