MicroRNAs (miRNAs) constitute a large class of regulatory RNAs that repress target messenger RNAs to control various biological processes. Accordingly, miRNA biogenesis is highly regulated, controlled at both transcriptional and post-transcriptional levels, and overexpression and underexpression of miRNAs are linked to various human diseases, particularly cancers. As RNA concentrations are generally a function of biogenesis and turnover, active miRNA degradation might also modulate miRNA accumulation, and the plant 3'-->5' exonuclease SDN1 has been implicated in miRNA turnover. Here we report that degradation of mature miRNAs in the nematode Caenorhabditis elegans, mediated by the 5'-->3' exoribonuclease XRN-2, affects functional miRNA homeostasis in vivo. We recapitulate XRN-2-dependent miRNA turnover in larval lysates, where processing of precursor-miRNA (pre-miRNA) by Dicer, unannealing of the miRNA duplex and loading of the mature miRNA into the Argonaute protein of the miRNA-induced silencing complex (miRISC) are coupled processes that precede degradation of the mature miRNA. Although Argonaute:miRNA complexes are highly resistant to salt, larval lysate promotes efficient release of the miRNA, exposing it to degradation by XRN-2. Release and degradation can both be blocked by the addition of miRNA target RNA. Our results therefore suggest the presence of an additional layer of regulation of animal miRNA activity that might be important for rapid changes of miRNA expression profiles during developmental transitions and for the maintenance of steady-state concentrations of miRNAs. This pathway might represent a potential target for therapeutic intervention on miRNA expression.