Elevated expression of the prostaglandin synthase cyclooxygenase-2 (COX-2) is commonly observed in many chronic inflammatory diseases and cancer. However, the mechanisms allowing for pathogenic COX-2 overexpression are largely unknown. The gene for COX-2 (PTGS2) carries a common single-nucleotide polymorphism (SNP) at position 8473 (T8473C), in exon 10 that is associated with diseases in which COX-2 overexpression is a contributing factor. We demonstrate that the T8473C SNP resides within a region that targets COX-2 mRNA for degradation through microRNA-mediated regulation. miR-542-3p was identified to bind transcripts derived from the 8473T allele and promote mRNA decay. By contrast, the presence of the variant 8473C allele interfered with miR-542-3p binding, allowing for mRNA stabilization, and this effect was rescued using a mutated miR-542-3p at the respective 8473 site. Colon cancer cells and tissue displayed COX-2 mRNA levels that were dependent on T8473C allele dosage, and allele-specific expression of COX-2 was observed to be a contributing factor promoting COX-2 overexpression. These findings provide a novel molecular explanation underlying disease susceptibility associated with COX-2 T8473C SNP, and identify it as a potential marker for identifying cancer patients best served through selective COX-2 inhibition.