A set of seven structurally related Sm proteins forms the core of the snRNP particles containing the spliceosomal U1, U2, U4 and U5 snRNAs. A search of the genomic sequence of Saccharomyces cerevisiae has identified a number of open reading frames that potentially encode structurally similar proteins termed Lsm (Like Sm) proteins. With the aim of analysing all possible interactions between the Lsm proteins and any protein encoded in the yeast genome, we performed exhaustive and iterative genomic two-hybrid screens, starting with the Lsm proteins as baits. Indeed, extensive interactions amongst eight Lsm proteins were found that suggest the existence of a Lsm complex or complexes. These Lsm interactions apparently involve the conserved Sm domain that also mediates interactions between the Sm proteins. The screens also reveal functionally significant interactions with splicing factors, in particular with Prp4 and Prp24, compatible with genetic studies and with the reported association of Lsm proteins with spliceosomal U6 and U4/U6 particles. In addition, interactions with proteins involved in mRNA turnover, such as Mrt1, Dcp1, Dcp2 and Xrn1, point to roles for Lsm complexes in distinct RNA metabolic processes, that are confirmed in independent functional studies. These results provide compelling evidence that two-hybrid screens yield functionally meaningful information about protein–protein interactions and can suggest functions for uncharacterized proteins, especially when they are performed on a genome-wide scale.