We introduce two large-scale resources for functional analysis of microRNA—a decoy/sponge library for inhibiting microRNA function and a sensor library for monitoring microRNA activity. To take advantage of the sensor library, we developed a high-throughput assay called Sensor-seq, which permits the activity of hundreds of microRNAs to be quantified simultaneously. Using this approach, we show that only the most abundant microRNAs within a cell mediate significant target suppression. Over 60% of detected microRNAs had no discernible activity, indicating that the functional ‘miRNome’ of a cell is considerably smaller than currently inferred from profiling studies. Moreover, some highly expressed microRNAs exhibit relatively weak activity, which in some cases correlated with a high target-to-microRNA ratio or increased nuclear localization of the microRNA. Finally, we show that the microRNA decoy library can be used for pooled loss-of-function studies. These tools provide valuable resources for studying microRNA biology and for microRNA-based therapeutics.