| x                                                      | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  |
|--------------------------------------------------------|------------------------------------------------------------------------------------------|
|                                                   |                                                                                     |
|                                                   | For the quarterly period ended                                                           | March 26, 2011 |
|                                                   |                                                                                     |
| OR                                                     |
|                                                   |                                                                                     |
| o                                                      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|                                                   |                                                                                     |
|                                                   | For the transition period from                                                           |   | to |   |
|                                                   |                                                                                     |
|                                                   | Commission file number                                                                   | 1-367 |
|                                                   |
| THE L. S. STARRETT COMPANY                             |
| (Exact name of registrant as specified in its charter) |

| MASSACHUSETTS                                                  |   | 04-1866480                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |

| 121 CRESCENT STREET, ATHOL, MASSACHUSETTS |   | 01331-1915 |
|-------------------------------------------|--------|------------|
| (Address of principal executive offices)  |   | (Zip Code) |
| Registrant's telephone number, including area code                                                                                                                                                                                                                                                                                                                                                    | 978-249-3551   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|
|                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                  |
| Former name, address and fiscal year, if changed since last report                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                  |
| Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES x    NO o |
|                                                                                                                                                                                                                                                                                                                                                                                                  |
| Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act, (Check One):                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                  |
| Large Accelerated Filer o    Accelerated Filer x    Non-Accelerated Filer o    Smaller Reporting Company o                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                             |
| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o    NO x                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                  |
| Common Shares outstanding as of                                                                                                                                                                                                                                                                                                                                                                  | April 30, 2011 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |           |
| Class A Common Shares                                                                                                                                                                                                                                                                                                                                                                            | 5,914,376      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                  |           |
| Class B Common Shares                                                                                                                                                                                                                                                                                                                                                                            | 788,925        |   |

----

|                                                                 |                                                                                                                     | Page No. |
|----------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|----------|
|                                                                 |                                                                                                                     |     |
| Part I.  Condensed Consolidated Unaudited Financial Statements: |                                                                                                                     |
|                                                                 |                                                                                                                     |     |
| Item 1.                                                         | Financial Statements                                                                                                     |     |
|                                                                 |                                                                                                                     |     |
|                                                                 | Consolidated Balance Sheets-March 26, 2011 (unaudited) and June 26, 2010                                                 | 3        |
|                                                                 |                                                                                                                     |     |
|                                                                 | Consolidated Statements of Operations-thirteen and thirty-nine weeks ended March 26, 2011 and March 27, 2010 (unaudited) | 4        |
|                                                                 |                                                                                                                     |     |
|                                                                 | Consolidated Statements of Cash Flows-thirty-nine weeks ended March 26, 2011 and March 27, 2010 (unaudited)              | 5        |
|                                                                 |                                                                                                                     |     |
|                                                                 | Consolidated Statements of Stockholders' Equity -Thirty-nine weeks ended March 26, 2011 and March 27, 2010 (unaudited)   | 6        |
|                                                                 |                                                                                                                     |     |
|                                                                 | Notes to Unaudited Consolidated Financial Statements                                                                     | 7-10     |
|                                                                 |                                                                                                                     |     |
| Item 2.                                                              | Management's Discussion and Analysis of Financial Condition and Results of Operations                                    | 11-13    |
|                                                                 |                                                                                                                     |     |
| Item 3.                                                              | Quantitative and Qualitative Disclosures About Market Risk                                                               | 13       |
|                                                                 |                                                                                                                     |     |
| Item 4.                                                              | Controls and Procedures                                                                                                  | 14       |
|                                                                 |                                                                                                                     |     |
| Part II.  Other information:                                    |                                                                                                                     |
|                                                                 |                                                                                                                     |     |
| Item 1A.                                                             | Risk Factors                                                                                                             | 15       |
|                                                                 |                                                                                                                     |     |
| Item 6.                                                              | Exhibits                                                                                                                 | 15       |
|                                                                 |                                                                                                                     |     |
| SIGNATURES                                                           |                                                                                                                     |

----

| Part I.  | Financial Information |
|---------------|-----------------------|

| Item 1.  | Condensed Consolidated Unaudited Financial Statements |
|---------------|-------------------------------------------------------|

|                                                                                                                            |   | March 262011(unaudited) |    |   | June 262010(audited) |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|--------|----------------------|--------|
| ASSETS                                                                                                                          |   |                    |    |   |                 |   |
| Current assets:                                                                                                                 |   |                    |    |   |                 |   |
| Cash                                                                                                                            |   | $                       | 21,834  |   |                 | $      | 20,478 |   |
| Investments                                                                                                                     |   |                    | -       |   |                 |   | 1,250 |   |
| Accounts receivable (less allowance for doubtful accounts of $1,092 and $607)                                                   |   |                    | 40,078  |   |                 |   | 33,707 |   |
| Inventory                                                                                                                       |   |                    | 55,837  |   |                 |   | 46,156 |   |
| Deferred income tax asset                                                                                                       |   |                    | 3,589   |   |                 |   | 3,300 |   |
| Prepaid expenses, taxes and other current assets                                                                                |   |                    | 7,854   |   |                 |   | 5,510 |   |
| Total current assets                                                                                                            |   |                    | 129,192 |   |                 |   | 110,401 |   |
|                                                                                                                            |   |                    |    |   |                 |   |   |   |
| Property, plant and equipment, at cost (less accumulated depreciation of $130,654 and $120,943)                                 |   |                    | 55,072  |   |                 |   | 56,529 |   |
| Property held for sale                                                                                                          |   |                    | 788     |   |                 |   | 2,699 |   |
| Intangible assets (less accumulated amortization of $5,910 and $4,973)                                                          |   |                    | 367     |   |                 |   | 1,303 |   |
| Other assets                                                                                                                    |   |                    | 692     |   |                 |   | 280 |   |
| Taxes receivable                                                                                                                |   |                    | 2,807   |   |                 |   | 2,807 |   |
| Deferred income tax asset, net                                                                                                  |   |                    | 26,101  |   |                 |   | 26,115 |   |
| Total assets                                                                                                                    |   | $                       | 215,019 |   |                 | $      | 200,134 |   |
|                                                                                                                            |   |                    |    |   |                 |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                      |   |                    |    |   |                 |   |   |   |
| Current liabilities:                                                                                                            |   |                    |    |   |                 |   |   |   |
| Short-term debt and current maturities                                                                                          |   | $                       | 6,277   |   |                 | $      | 2,696 |   |
| Accounts payable and accrued expenses                                                                                           |   |                    | 15,937  |   |                 |   | 17,740 |   |
| Accrued salaries and wages                                                                                                      |   |                    | 5,381   |   |                 |   | 5,037 |   |
| Total current liabilities                                                                                                       |   |                    | 27,595  |   |                 |   | 25,473 |   |
| Long-term taxes payable                                                                                                         |   |                    | 9,290   |   |                 |   | 9,132 |   |
| Deferred income tax liabilities                                                                                                 |   |                    | 2,341   |   |                 |   | 2,436 |   |
| Long-term debt                                                                                                                  |   |                    | 532     |   |                 |   | 706 |   |
| Postretirement benefit liability                                                                                                |   |                    | 32,971  |   |                 |   | 30,005 |   |
| Total liabilities                                                                                                               |   |                    | 72,729  |   |                 |   | 67,752 |   |
|                                                                                                                            |   |                    |    |   |                 |   |   |   |
| Stockholders' equity:                                                                                                           |   |                    |    |   |                 |   |   |   |
| Class A Common $1 par (20,000,000 shares authorized) 5,910,263 outstanding on 3/26/2011 and 5,858,700 outstanding on 6/26/2010  |   |                    | 5,910   |   |                 |   | 5,859 |   |
| Class B Common $1 par (10,000,000 shares authorized) 788,825 outstanding on 3/26/2011 and 821,204 outstanding on 6/26/2010 |   |                    | 789     |   |                 |   | 821 |   |
| Additional paid-in capital                                                                                                      |   |                    | 50,597  |   |                 |   | 50,373 |   |
| Retained earnings reinvested and employed in the business                                                                       |   |                    | 125,086 |   |                 |   | 122,724 |   |
| Accumulated other comprehensive loss                                                                                            |   |                    | (40,092 | )      |                 |   | (47,395 | ) |
| Total stockholders' equity                                                                                                      |   |                    | 142,290 |   |                 |   | 132,382 |   |
| Total liabilities and stockholders’ equity                                                                                |   | $                       | 215,019 |   |                 | $      | 200,134 |   |

----

|                                                                      |   | 13 Weeks Ended |   |   | 39 Weeks Ended |   |
|---------------------------------------------------------------------------|--------|----------------|--------|--------|----------------|--------|
|                                                                      |   | 3/26/2011      |   |   | 3/27/2010      |   |   | 3/26/2011 |   |   | 3/27/2010 |   |
|                                                                      |   |           |   |   |           |   |   |   |   |   |   |   |
| Net sales                                                                 |   | $              | 58,763 |   |           | $      | 48,643 |   |   | $ | 173,592 |   |   | $ | 139,751 |   |
| Cost of goods sold                                                        |   |           | 39,821 |   |           |   | 33,110 |   |   |   | 117,300 |   |   |   | 98,285 |   |
|                                                                      |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Gross margin                                                              |   |           | 18,942 |   |           |   | 15,533 |   |   |   | 56,292 |   |   |   | 41,466 |   |
| % of Net sales                                                            |   |           | 32.2   | %      |           |   | 31.9 | % |   |   | 32.4 | % |   |   | 29.7 | % |
|                                                                      |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Selling and general expense                                               |   |           | 18,049 |   |           |   | 14,600 |   |   |   | 51,801 |   |   |   | 43,312 |   |
| Gain on sale of building                                                  |   |           | (1,350 | )      |           |   | - |   |   |   | (1,350 | ) |   |   | - |   |
|                                                                      |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Operating income (loss)                                                   |   |           | 2,243  |   |           |   | 933 |   |   |   | 5,841 |   |   |   | (1,846 | ) |
|                                                                      |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense)                                                    |   |           | (44    | )      |           |   | 108 |   |   |   | 493 |   |   |   | (534 | ) |
|                                                                      |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (loss) before income taxes                                       |   |           | 2,199  |   |           |   | 1,041 |   |   |   | 6,334 |   |   |   | (2,380 | ) |
|                                                                      |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense                                                        |   |           | 494    |   |           |   | 862 |   |   |   | 2,500 |   |   |   | 884 |   |
|                                                                      |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Net earnings (loss)                                                       |   | $              | 1,705  |   |           | $      | 179 |   |   | $ | 3,834 |   |   | $ | (3,264 | ) |
|                                                                      |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted earnings (loss) per share                               |   | $              | 0.25   |   |           | $      | 0.03 |   |   | $ | 0.57 |   |   | $ | (0.49 | ) |
|                                                                      |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Average outstanding shares used in per share calculations (in thousands): |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                     |   |           | 6,698  |   |           |   | 6,673 |   |   |   | 6,691 |   |   |   | 6,663 |   |
| Diluted                                                                   |   |           | 6,724  |   |           |   | 6,687 |   |   |   | 6,712 |   |   |   | 6,663 |   |
|                                                                      |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Dividends per share                                                       |   | $              | 0.08   |   |           | $      | 0.06 |   |   | $ | 0.22 |   |   | $ | 0.24 |   |

----

|                                                                     |   | 39 Weeks Ended |   |
|--------------------------------------------------------------------------|--------|----------------|--------|
|                                                                     |   | 3/26/2011      |   |   | 3/27/2010 |   |
|                                                                     |   |           |   |   |   |   |
| Cash flows from operating activities:                                    |   |           |   |   |   |   |
| Net earnings (loss)                                                      |   | $              | 3,834  |   |   | $ | (3,264 | ) |
| Gain in sale of building                                                 |   |           | (1,350 | ) |   |   | - |   |
| Non-cash operating activities:                                           |   |           |   |   |   |   |   |   |
| Depreciation                                                             |   |           | 7,010  |   |   |   | 6,795 |   |
| Amortization                                                             |   |           | 936    |   |   |   | 902 |   |
| Fixed asset impairment                                                   |   |           | -      |   |   |   | 130 |   |
| Net long-term tax payable                                                |   |           | 107    |   |   |   | (453 | ) |
| Deferred taxes                                                           |   |           | (12    | ) |   |   | (623 | ) |
| Unrealized transaction (gains)/losses                                    |   |           | (137   | ) |   |   | (222 | ) |
| Retirement benefits                                                      |   |           | 2,727  |   |   |   | 2,229 |   |
| Equity method loss on investment in private software development company |   |           | 541    |   |   |   | - |   |
| Working capital changes                                                  |   |           |   |   |   |   |   |   |
| Receivables                                                              |   |           | (3,308 | ) |   |   | (4,441 | ) |
| Inventories                                                              |   |           | (7,076 | ) |   |   | 13,855 |   |
| Other current assets                                                     |   |           | (2,298 | ) |   |   | 510 |   |
| Other current liabilities                                                |   |           | (2,887 | ) |   |   | 2,474 |   |
| Prepaid pension cost and other                                           |   |           | 77     |   |   |   | (116 | ) |
| Net (used in) by operating activities                                    |   |           | (1,836 | ) |   |   | 17,776 |   |
|                                                                     |   |           |   |   |   |   |   |   |
| Cash flows from investing activities:                                    |   |           |   |   |   |   |   |   |
| Additions to property, plant and equipment                               |   |           | (4,051 | ) |   |   | (5,914 | ) |
| Decrease in investments                                                  |   |           | 1,250  |   |   |   | 618 |   |
| Investment in private software development company                       |   |           | (950   | ) |   |   | - |   |
| Proceeds from sale of building                                           |   |           | 3,262  |   |   |   | - |   |
| Earn-out paid for Kinemetric Engineering                                 |   |           | -      |   |   |   | (110 | ) |
| Net cash (used in) investing activities                                  |   |           | (489   | ) |   |   | (5,406 | ) |
|                                                                     |   |           |   |   |   |   |   |   |
| Cash flows from financing activities:                                    |   |           |   |   |   |   |   |   |
| Proceeds from short-term borrowings                                      |   |           | 4,887  |   |   |   | 13,982 |   |
| Short-term debt repayments                                               |   |           | (1,303 | ) |   |   | (19,233 | ) |
| Proceeds from long-term borrowings                                       |   |           | -      |   |   |   | 129 |   |
| Long-term debt repayments                                                |   |           | (202   | ) |   |   | (523 | ) |
| Proceeds from common stock issued                                        |   |           | 196    |   |   |   | 305 |   |
| Dividends paid                                                           |   |           | (1,472 | ) |   |   | (1,599 | ) |
| Net cash provided by (used in) financing activities                      |   |           | 2,106  |   |   |   | (6,939 | ) |
|                                                                     |   |           |   |   |   |   |   |   |
| Effect of exchange rate changes on cash                                  |   |           | 1,575  |   |   |   | (450 | ) |
|                                                                     |   |           |   |   |   |   |   |   |
| Net increase in cash                                                     |   |           | 1,356  |   |   |   | 4,981 |   |
| Cash, beginning of period                                                |   |           | 20,478 |   |   |   | 10,248 |   |
| Cash, end of period                                                      |   | $              | 21,834 |   |   | $ | 15,229 |   |

| Supplemental cash flow information: |   |   |   |   |   |   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|
|                                |   |   |   |   |   |   |
| Interest paid                       |   | $      | 245    |   |   | $      | 1,537 |   |
| Taxes paid, net                     |   | $      | 3,357  |   |   | $      | 880 |   |

----

|                                                               |   | Common Stock Out-standing($1 Par) |   |   | AdditionalPaid-in |   |   | Retained |   |   | AccumulatedOther Comprehensive |   |   |   |    |
|--------------------------------------------------------------------|--------|----------------------------------------|--------|--------|-------------------|--------|--------|----------|--------|--------|--------------------------------|--------|--------|--------|---------|
|                                                               |   | Class A                                |   |   | Class B           |   |   | Capital  |   |   | Earnings                       |   |   | Loss   |    |   | Total |   |
| Balance June 27, 2009                                              |   | $                                      | 5,770  |   |              | $      | 869    |     |   | $      | 49,984                         |   |   | $      | 127,707 |   |   | $ | (41,452 | ) |   | $ | 142,878 |   |
| Comprehensive income (loss):                                       |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Net loss                                                           |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   | (3,264  | ) |   |   |   |   |   |   | (3,264 | ) |
| Unrealized net gain on investments                                 |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   | 5 |   |   |   | 5 |   |
| Translation loss, net                                              |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   | 2,615 |   |   |   | 2,615 |   |
| Total comprehensive loss                                           |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   |   |   |   |   | (644 | ) |
| Dividends ($.24 per share)                                         |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   | (1,599  | ) |   |   |   |   |   |   | (1,599 | ) |
| Treasury shares:                                                   |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Issued                                                             |   |                                   | 33     |   |              |   |   |     |   |   | 261                            |   |   |   |    |   |   |   |   |   |   |   | 294 |   |
| Issuance of stock under ESPP                                       |   |                                   |   |   |              |   | 2      |     |   |   | 59                             |   |   |   |    |   |   |   |   |   |   |   | 61 |   |
| Conversion                                                         |   |                                   | 32     |   |              |   | (32    | )        |   |   |                           |   |   |   |    |   |   |   |   |   |   |   | - |   |
|                                                               |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance March 27, 2010                                             |   | $                                      | 5,835  |   |              | $      | 839    |     |   | $      | 50,304                         |   |   | $      | 122,844 |   |   | $ | (38,832 | ) |   | $ | 140,990 |   |
|                                                               |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance June 26, 2010                                              |   | $                                      | 5,859  |   |              | $      | 821    |     |   | $      | 50,373                         |   |   | $      | 122,724 |   |   | $ | (47,395 | ) |   | $ | 132,382 |   |
| Comprehensive income:                                              |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Net income                                                         |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   | 3,834   |   |   |   |   |   |   |   | 3,834 |   |
| Minimum pension liability, net                                     |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   | 118 |   |   |   | 118 |   |
| Translation gain, net                                              |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   | 7,185 |   |   |   | 7,185 |   |
| Total comprehensive income                                         |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   |   |   |   |   | 11,137 |   |
| Dividends ($0.22 per share)                                        |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   | (1,472  | ) |   |   |   |   |   |   | (1,472 | ) |
| Treasury shares:                                                   |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Issued                                                             |   |                                   | 17     |   |              |   |   |     |   |   | 156                            |   |   |   |    |   |   |   |   |   |   |   | 173 |   |
| Issuance of stock under ESPP                                       |   |                                   |   |   |              |   | 2      |     |   |   | 68                             |   |   |   |    |   |   |   |   |   |   |   | 70 |   |
| Conversion                                                         |   |                                   | 34     |   |              |   | (34    | )        |   |   |                           |   |   |   |    |   |   |   |   |   |   |   | - |   |
|                                                               |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance March 26, 2011                                             |   | $                                      | 5,910  |   |              | $      | 789    |     |   | $      | 50,597                         |   |   | $      | 125,086 |   |   | $ | (40,092 | ) |   | $ | 142,290 |   |
|                                                               |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Cumulative Balance:                                                |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Translation loss                                                   |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   | $ | (4,386 | ) |   |   |   |   |
| Amounts not recognized as a component of net periodic benefit cost |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   |   | (35,706 | ) |   |   |   |   |
|                                                               |   |                                   |   |   |              |   |   |     |   |   |                           |   |   |   |    |   |   | $ | (40,092 | ) |   |   |   |   |

----

|   | o | Level 1 – Financial assets whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market which the company has the ability to access at the measurement date (examples include active exchange-traded equity securities and most U.S. Government and agency securities). |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                              |   | Level 1   |   |
|---------------------------------------------------|--------|-----------|--------|
|                                              |   | 3/26/2011 |   |   | 6/26/2010 |   |
| International Bonds Puerto Rican debt obligations |   |      | -      |   |   |   | 1,250 |   |
|                                              |   |      | -      |   |   |   | 1,250 |   |

----

|                                |                |   | March 262011 |    |   | June 262010 |   |
|-------------------------------------|---------------------|--------|--------------|---------|--------|-------------|--------|
| Raw Material and Supplies           |                |   | $            | 30,632  |   |        | $      | 27,251 |   |
| Goods in Process and Finished Parts |                |   |         | 23,862  |   |        |   | 19,136 |   |
| Finished Goods                      |                |   |         | 26,707  |   |        |   | 24,960 |   |
|                                |                |   |         | 81,201  |   |        |   | 71,347 |   |
|                                | LIFO Reserve   |   |         | (25,364 | )      |        |   | (25,191 | ) |
|                                | Net Inventory  |   | $            | 55,837  |   |        | $      | 46,156 |   |

|                                        |   | Thirteen WeeksEnded March |   |   | Thirty-nine WeeksEnded March |   |
|---------------------------------------------|--------|---------------------------|--------|--------|------------------------------|--------|
|                                        |   | 2011                      |   |   | 2010                         |   |   | 2011 |   |   | 2010 |   |
| Service cost                                |   | $                         | 575    |   |                         | $      | 484 |   |   | $ | 1,724 |   |   | $ | 1,457 |   |
| Interest cost                               |   |                      | 1,618  |   |                         |   | 1,567 |   |   |   | 4,847 |   |   |   | 4,720 |   |
| Expected return on plan assets              |   |                      | (1,867 | )      |                         |   | (1,775 | ) |   |   | (5,594 | ) |   |   | (5,346 | ) |
| Amortization of prior service cost          |   |                      | 158    |   |                         |   | 95 |   |   |   | 472 |   |   |   | 288 |   |
| Amortization of unrecognized actuarial loss |   |                      | 680    |   |                         |   | 701 |   |   |   | 2,040 |   |   |   | 2,104 |   |
|                                        |   | $                         | 1,164  |   |                         | $      | 1,072 |   |   | $ | 3,489 |   |   | $ | 3,223 |   |

|                                        |   | Thirteen WeeksEnded March |   |   | Thirty-nine WeeksEnded March |   |
|---------------------------------------------|--------|---------------------------|--------|--------|------------------------------|--------|
|                                        |   | 2011                      |   |   | 2010                         |   |   | 2011 |   |   | 2010 |   |
| Service cost                                |   | $                         | 92     |   |                         | $      | 85 |   |   | $ | 276 |   |   | $ | 254 |   |
| Interest cost                               |   |                      | 151    |   |                         |   | 169 |   |   |   | 453 |   |   |   | 508 |   |
| Amortization of prior service benefit       |   |                      | (226   | )      |                         |   | (226 | ) |   |   | (679 | ) |   |   | (679 | ) |
| Amortization of unrecognized actuarial loss |   |                      | 7      |   |                         |   | - |   |   |   | 21 |   |   |   | - |   |
|                                        |   | $                         | 24     |   |                         | $      | 28 |   |   | $ | 71 |   |   | $ | 83 |   |

----

|                               |   | March 26, 2011 |   |   | June 26, 2010 |   |
|------------------------------------|--------|----------------|--------|--------|---------------|--------|
| Short-term and current maturities  |   |           |   |   |          |   |
| Loan and Security Agreement        |   | $              | 6,000  |   |          | $      | 1,700 |   |
| Short-term foreign credit facility |   |           | 41     |   |          |   | 738 |   |
| Capitalized leases                 |   |           | 236    |   |          |   | 258 |   |
|                               |   | $              | 6,277  |   |          | $      | 2,696 |   |
| Long-term debt                     |   |           |   |   |          |   |   |   |
| Capitalized leases                 |   | $              | 532    |   |          | $      | 706 |   |
|                               |   | $              | 6,809  |   |          | $      | 3,402 |   |

|   | o | Cash and short term instruments |
|--------|---|---------------------------------|

|   | The carrying amount approximates fair value because of the short maturity of those investments |
|--------|------------------------------------------------------------------------------------------------|

----

|   | o | Investments |
|--------|---|-------------|

|   | The fair value of some investments are estimated on quoted market prices for those or similar investments. |
|--------|------------------------------------------------------------------------------------------------------------|

|   | o | Short and long-term debt |
|--------|---|--------------------------|

|   | The fair value of the Company’s short and long term debt is estimated based on quoted market prices for corporate debt having similar characteristics or on the current rates offered to the Company for debt of the same remaining maturities. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|            |   | March 26, 2011  |   |   | June 26, 2010 |   |
|-----------------|--------|-----------------|--------|--------|---------------|--------|
|            |   | Carrying Amount |   |   | Fair Value    |   |   | Carrying Amount |   |   | Fair Value |   |
|            |   |            |   |   |          |   |   |   |   |   |   |   |
| Cash            |   | $               | 21,834 |   |          | $      | 21,834 |   |   | $ | 20,478 |   |   | $ | 20,478 |   |
| Short-term debt |   |            | 6,277  |   |          |   | 6,277 |   |   |   | 2,696 |   |   |   | 2,696 |   |
| Investments     |   |            | -      |   |          |   | - |   |   |   | 1,250 |   |   |   | 1,250 |   |
| Long-term debt  |   |            | 532    |   |          |   | 532 |   |   |   | 706 |   |   |   | 706 |   |

----

----

----

| Cash flows (in thousands)                       |   | Thirty-nine Weeks |   |
|-------------------------------------------------|--------|-------------------|--------|
|                                            |   | 3/26/2011         |   |   | 3/27/2010 |   |
|                                            |   |              |   |   |   |   |
| Cash (used in) operations                       |   | $                 | (1,836 | ) |   | $ | 17,776 |   |
| Cash (used in) investing activities             |   |              | (489   | ) |   |   | (5,406 | ) |
| Cash provided by (used in) financing activities |   |              | 2,106  |   |   |   | (6,939 | ) |
| Effect of exchange rates changes on cash        |   |              | 1,575  |   |   |   | (450 | ) |
|                                            |   |              |   |   |   |   |   |   |
| Net increase in cash                            |   | $                 | 1,356  |   |   | $ | 4,981 |   |

| Item 3.  | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK |
|---------------|-----------------------------------------------------------|

----

| Item 4.  | CONTROLS AND PROCEDURES |
|---------------|-------------------------|

|   | o | The Company completed the development of an improved financial reporting framework which will facilitate a uniform approach to consolidated and subsidiary financial reporting and analysis.  This project was completed in the second quarter of fiscal 2011.                  |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | o | The Company has added experienced financial resources to its staff and will continue to evaluate further requirements. The plan to correct the major financial reporting and control problems began in October of 2010 and is expected to be completed by the fourth quarter fiscal 2011. |

----

| PART II.  | OTHER INFORMATION |
|----------------|-------------------|

| Item 1A.  | Risk Factors |
|----------------|--------------|

| Item 6.  | Exhibits |
|---------------|----------|

| 31a | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. |
|-----|-------------------------------------------------------------------------------------------------------------------------|

| 31b | Certification of Principal Financial Officer pursuant to Section 202 of the Sarbanes-Oxley Act of 2002, filed herewith. |
|-----|-------------------------------------------------------------------------------------------------------------------------|

| 32 | Certifications of the Principal Executive Officer and the Principal Financial Officer pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                    |   | THE L. S. STARRETT COMPANY(Registrant)       |
|--------|-------------------------|--------|----------------------------------------------|
|   |                    |   |                                         |
|   |                    |   |                                         |
| Date   | May  4 , 2011 |   | S/R. Douglas A. Starrett                     |
|   |                    |   | Douglas A. Starrett - President and CEO      |
|   |                    |   |                                         |
| Date   | May  4 , 2011 |   | S/R. Francis J. O’Brien                |
|   |                    |   | Francis J. O’Brien - Treasurer and CFO |