Bin3 was first identified as a Bicoid-interacting protein in a yeast two-hybrid screen. In human cells, a Bin3 ortholog (BCDIN3) methylates the 5' end of 7SK RNA, but its role in vivo is unknown. Here, we show that in Drosophila, Bin3 is important for dorso-ventral patterning in oogenesis and for anterior-posterior pattern formation during embryogenesis. Embryos that lack Bin3 fail to repress the translation of caudal mRNA and exhibit head involution defects. bin3 mutants also show (1) a severe reduction in the level of 7SK RNA, (2) reduced binding of Bicoid to the caudal 3' UTR, and (3) genetic interactions with bicoid, and with genes encoding eIF4E, Larp1, polyA binding protein (PABP), and Ago2. 7SK RNA coimmunoprecipitated with Bin3 and is present in Bicoid complexes. These data suggest a model in which Bicoid recruits Bin3 to the caudal 3' UTR. Bin3's role is to bind and stabilize 7SK RNA, thereby promoting formation of a repressive RNA-protein complex that includes the RNA-binding proteins Larp1, PABP, and Ago2. This complex would prevent translation by blocking eIF4E interactions required for initiation. Our results, together with prior network analysis in human cells, suggest that Bin3 interacts with multiple partner proteins, methylates small non-coding RNAs, and plays diverse roles in development.