MicroRNAs (miRNAs) are endogenous noncoding small RNAs with important roles in many biological pathways; their generation and activity are under precise regulation [1-3]. Emerging evidence suggests that miRNA pathways are precisely modulated with controls at the level of transcription [4-8], processing [9-11], and stability [12, 13], with miRNA deregulation linked with diseases [14] and neurodegenerative disorders [15]. In the Drosophila miRNA biogenesis pathway, long primary miRNA transcripts undergo sequential cleavage [16-18] to release the embedded miRNAs. Mature miRNAs are then loaded into Argonaute1 (Ago1) within the RNA-induced silencing complex (RISC) [19, 20]. Intriguingly, we found that Drosophila miR-34 displays multiple isoforms that differ at the 3' end, suggesting a novel biogenesis mechanism involving 3' end processing. To define the cellular factors responsible, we performed an RNA interference (RNAi) screen and identified a putative 3'→5' exoribonuclease CG9247/nibbler essential for the generation of the smaller isoforms of miR-34. Nibbler (Nbr) interacts with Ago1 and processes miR-34 within RISC. Deep sequencing analysis revealed a larger set of multi-isoform miRNAs that are controlled by nibbler. These findings suggest that Nbr-mediated 3' end processing represents a critical step in miRNA maturation that impacts miRNA diversity.