In eukaryotes, seven Sm proteins bind to the U1, U2, U4 and U5 spliceosomal snRNAs while seven Smlike proteins (Lsm2p-Lsm8p) are associated with U6 snRNA. Another yeast Sm-like protein, Lsm1p, does not interact with U6 snRNA. Surprisingly, using the tandem affinity purification (TAP) method, we identified Lsm1p among the subunits associated with Lsm3p. Coprecipitation experiments demonstrated that Lsm1p, together with Lsm2p-Lsm7p, forms a new seven-subunit complex. We purified the two related Sm-like protein complexes and identified the proteins recovered in the purified preparations by mass spectrometry. This confirmed the association of the Lsm2p-Lsm8p complex with U6 snRNA. In contrast, the Lsm1p-Lsm7p complex is associated with Pat1p and Xrn1p exoribonuclease, suggesting a role in mRNA degradation. Deletions of LSM1, 6, 7 and PAT1 genes increased the half-life of reporter mRNAs. Interestingly, accumulating mRNAs were capped, suggesting a block in mRNA decay at the decapping step. These results indicate the involvement of a new conserved Sm-like protein complex and a new factor, Pat1p, in mRNA degradation and suggest a physical connection between decapping and exonuclease trimming.