MicroRNAs (miRNAs) broadly regulate gene expression through association with Argonaute (Ago), which also protects miRNAs from degradation. However, miRNA stability is known to vary and is regulated by poorly understood mechanisms. A major emerging process, termed target-directed miRNA degradation (TDMD), employs specialized target RNAs to selectively bind to miRNAs and induce their decay. Here, we report structures of human Ago2 (hAgo2) bound to miRNAs and TDMD-inducing targets. miRNA and target form a bipartite duplex with an unpaired flexible linker. hAgo2 cannot physically accommodate the RNA, causing the duplex to bend at the linker and display the miRNA 3′ end for enzymatic attack. Altering 3′ end display by changing linker flexibility, changing 3′ end complementarity, or mutationally inducing 3′ end release impacts TDMD efficiency, leading to production of distinct 3′-miRNA isoforms in cells. Our results uncover the mechanism driving TDMD and reveal 3′ end display as a key determinant regulating miRNA activity via 3′ remodeling and/or degradation. Display omitted •Structural and mutational analyses reveal mechanism of target-directed miRNA degradation•TDMD targets trap Ago2 in a conformation with miRNA 3′ end displayed for enzymatic attack•miRNA-TDMD target pairing features dictate miRNA 3′ end remodeling and fate•miRNA 3′ end display is a mechanism that controls miRNA stability and activity MicroRNAs (miRNAs) shape post-transcriptional gene expression by repressing messenger RNAs. Conversely, certain target RNAs induce miRNA decay through a process called target-directed miRNA degradation (TDMD). Sheu-Gruttadauria et al. show how these targets expose the miRNA 3′ end for enzymatic attack, enabling 3′ end remodeling and degradation.