MicroRNAs (miRNAs) are endogenous noncoding small RNAs with important roles in many biological pathways; their generation and activity are under precise regulation. Emerging evidence suggests that miRNA pathways are precisely modulated with controls at the level of transcription, processing, and stability, with miRNA deregulation linked with diseases and neurodegenerative disorders. In the Drosophila miRNA biogenesis pathway, long primary miRNA transcripts undergo sequential cleavage to release the embedded miRNAs. Mature miRNAs are then loaded into Argonaute1 (Ago1) within the RNA-induced silencing complex (RISC). 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. Total RNA was isolated using mirVana (Ambion) and size-fractionated by PAGE into 18-30nt. These were independently processed and sequenced using the Illumina GAII platform. In total, four libraries were analyzed.