TRIM-NHL proteins represent a large class of metazoan proteins implicated in development and disease. We demonstrate that a C. elegans TRIM-NHL protein, NHL-2, functions as a cofactor for the microRNA-induced silencing complex (miRISC) and thereby enhances the posttranscriptional repression of several genetically verified microRNA targets, including hbl-1 and let-60/Ras (by the let-7 family of microRNAs) and cog-1 (by the lsy-6 microRNA). NHL-2 is localized to cytoplasmic P-bodies and physically associates with the P-body protein CGH-1 and the core miRISC components ALG-1/2 and AIN-1. nhl-2 and cgh-1 mutations compromise the repression of microRNA targets in vivo but do not affect microRNA biogenesis, indicating a role for an NHL-2:CGH-1 complex in the effector phase of miRISC activity. We propose that the NHL-2:CGH-1 complex functions in association with mature miRISC to modulate the efficacy of microRNA:target interactions in response to physiological and developmental signals, thereby ensuring the robustness of genetic regulatory pathways regulated by microRNAs.