MicroRNAs (miRNAs) have recently risen to prominence as novel factors responsible for post-transcriptional regulation of gene expression. miRNA genes have been posited as highly conserved in the clades in which they exist. Consequently, miRNAs have been used as rare genome change characters to estimate phylogeny by tracking their gain and loss. However, their short length (21-23 bp) has limited their perceived utility in sequenced-based phylogenetic inference. Here, using reference taxa with established phylogenetic relationships, we demonstrate that miRNA sequences are of high utility in quantitative, rather than in qualitative, phylogenetic analysis. The clear orthology among miRNA genes from different species makes it straightforward to identify and align these sequences from even fragmentary datasets. We also identify significant sequence conservation in the regions directly flanking miRNA genes, and show that this too is of utility in phylogenetic analysis, as well as highlighting conserved regions that will be of interest to other fields. Employing miRNA sequences from 12 sequenced drosophilid genomes, together with a Tribolium castaneum outgroup, we demonstrate that this approach is robust using Bayesian and maximum-likelihood methods. The utility of these characters is further demonstrated in the rhabditid nematodes and primates. As next-generation sequencing makes it more cost-effective to sequence genomes and small RNA libraries, this methodology provides an alternative data source for phylogenetic analysis. The approach allows rapid resolution of relationships between both closely related and rapidly evolving species, and provides an additional tool for investigation of relationships within the tree of life.