We have developed a differential cytolocalization assay (DCLA) that allows the observation of cytoplasmic protein/protein interactions in vivo. In the DCLA, interactions are visualized as a relocalization of a green fluorescent protein-tagged "prey" by a membrane-bound "bait." This assay was tested and utilized in Caenorhabditis elegans to probe interactions among proteins involved in RNA interference (RNAi) and nonsense-mediated decay (NMD) pathways. Several previously documented interactions were confirmed with DCLA, whereas uniformly negative results were obtained in several controls in which no interaction was expected. Novel interactions were also observed, including the association of SMG-5, a protein required for NMD, to several components of the RNAi pathway. The DCLA can be readily carried out under diverse conditions, allowing a dynamic assessment of protein interactions in vivo. We used this property to test a subset of the RNAi and NMD interactions in animals in which proteins central to each mechanism were mutated; several key associations in each machinery that can occur in vivo in the absence of a functional process were identified.