microRNAs (miRNAs) are 20~24nt small RNAs that are critical for many biological aspects, from development to age-associated processes. Starting from the identification of the first miRNA, lin-4, hundreds of miRNAs have been discovered across species. To reveal the role of miRNAs in aging, studies have profiled changes in miRNA levels with age. However, increasing evidence suggests that miRNAs show heterogeneity in length and sequence in different biological contexts. Despite the observation of such heterogeneity, it is largely unknown how such heterogeneity is generated, and whether it is biologically regulated or important. Here we report the characterization of a novel 3\u27-to-5\u27 exonuclease, Nibbler (Nbr), that generates different length miRNA isoforms in Drosophila. Small RNA deep-sequencing in flies followed by northern blots revealed a set of miRNAs that depend on Nbr for their length patterns. We pursued the biological importance of nbr by analyzing the impact of loss-of-function mutation of the nbr gene, as well as the effect of nbr loss on other classes of small RNAs such as piRNAs and endo-siRNAs by small RNA deep-sequencing of ovary tissue. This analysis revealed a critical role of nbr to regulate age-associated traits such as brain degeneration and locomotion, as well as the length of piRNAs and endo-siRNAs. Detailed analysis revealed that, even though most piRNA loci are affected, only select endo-siRNA loci are affected upon nbr loss. Finally, we report a novel age-associated change in miRNA heterogeneity: the increase in 2\u27-O-methylation of select miRNA isoforms with age. Detailed study by immunoprecipitation of Ago1 and Ago2, followed by northern blots and RNA deep-sequencing showed that this reflects increased loading of miRNA isoforms into Ago2 (siRISC) with age. Importantly, the loss of 2\u27-O-methylation of small RNAs by hen1 and ago2 mutations led to accelerated brain degeneration and shorter lifespan. Together, this research has revealed an important mechanism to generate 3\u27 end heterogeneity of miRNAs by Nbr, and a novel age-associated heterogeneity of miRNAs, 2\u27-O-methylation of miRNAs. Importantly, the lack of such heterogeneity led to accelerated age-associated defects, implying the potential importance of regulating the 3\u27 end heterogeneity of small RNAs on age-dependent processes in Drosophila