One of the main mechanisms of messenger RNA degradation in eukaryotes occurs by deadenylation-dependent decapping which leads to 5'-to-3' decay1, 2. A family of Sm-like (Lsm) proteins has been identified, members of which contain the 'Sm' sequence motif, form a complex with U6 small nuclear RNA and are required for pre-mRNA splicing3-9. Here we show that mutations in seven yeast Lsm proteins (Lsm1–Lsm7) also lead to inhibition of mRNA decapping. In addition, the Lsm1–Lsm7 proteins co-immunoprecipitate with the mRNA decapping enzyme (Dcp1), a decapping activator (Pat1/Mrt1) and with mRNA. This indicates that the Lsm proteins may promote decapping by interactions with the mRNA and the decapping machinery. In addition, the Lsm complex that functions in mRNA decay appears to be distinct from the U6-associated Lsm complex, indicating that Lsm proteins form specific complexes that affect different aspects of mRNA metabolism.