|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                               |
|        x                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | For      the quarterly period ended                                                                | September      26, 2009 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                               |
| OR                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                               |
|        o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 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 has submitted electronically and      posted on its corporate web site, if any, every Interactive Data File      required to be submitted and posted pursuant to Rule 405 of Regulation S-T      during the preceding 12 months (or for such shorter period that the      registrant was required to submit and post such files). YES o   NO      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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | November      5, 2009                                                                              |   |
| Class      A Common Shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 5,808,794                                                                                          |   |
| Class      B Common Shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 858,835                                                                                            |   |

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|                                                                                                                                                                         |   | Page No. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|
|                                                                                                                                                                         |   |     |
| Part      I.                      Financial      Information:  |   |     |
|                                                                                                                                                                         |   |     |
| Item      1.                      Financial      Statements    |   |     |
|                                                                                                                                                                         |   |     |
| Consolidated      Statements of Operations –thirteen      weeks ended September 26, 2009 and September 27, 2008      (unaudited)                                       |   | 3        |
|                                                                                                                                                                         |   |     |
| Consolidated      Statements of Cash Flows –thirteen      weeks ended September 26, 2009 and September 27, 2008      (unaudited)                                       |   | 4        |
|                                                                                                                                                                         |   |     |
| Consolidated      Balance Sheets –September      26, 2009 (unaudited) and June 27, 2009                                                                                |   | 5        |
|                                                                                                                                                                         |   |     |
| Consolidated      Statements of Stockholders' Equity -thirteen      weeks ended September 26, 2009 and September 27, 2008      (unaudited)                                   |   | 6        |
|                                                                                                                                                                         |   |     |
| Notes      to Consolidated Financial Statements                                                                                                                              |   | 7-11     |
|                                                                                                                                                                         |   |     |
| Item      2.Management's Discussion and Analysis of Financial Condition and Results      of Operations                                                                       |   | 11-16    |
|                                                                                                                                                                         |   |     |
| Item      3.Quantitative and Qualitative Disclosures About Market    Risk                                                                                                    |   | 16       |
|                                                                                                                                                                         |   |     |
| Item      4.                      Controls      and Procedures |   | 16-17    |
|                                                                                                                                                                         |   |     |
| Part      II.  Other information:                                                                                                                                  |   |     |
|                                                                                                                                                                         |   |     |
| Item      5.                      Risk      Factors            |   | 17       |
|                                                                                                                                                                         |   |     |
| Item      6.                      Exhibits                     |   | 17       |
|                                                                                                                                                                         |   |     |
| SIGNATURES                                                                                                                                                                   |   | 17       |

----

|                                                                                |   | 13 Weeks Ended |    |
|-------------------------------------------------------------------------------------|--------|----------------|---------|
|                                                                                |   | 9/26/09        |    |   | 9/27/08 |   |
|                                                                                |   |           |    |   |   |   |
| Net      sales                                                                      |   | $              | 40,573  |   |   | $ | 67,985 |   |
| Cost      of goods sold                                                             |   |           | (30,541 | ) |   |   | (46,792 | ) |
| Selling      and general expense                                                    |   |           | (14,353 | ) |   |   | (17,498 | ) |
| Other      (expense) income                                                         |   |           | (388    | ) |   |   | 535 |   |
|                                                                                |   |           |    |   |   |   |   |   |
| Earnings      (loss) before income taxes                                            |   |           | (4,709  | ) |   |   | 4,230 |   |
| Income      tax (benefit) expense                                                   |   |           | (1,578  | ) |   |   | 1,607 |   |
|                                                                                |   |           |    |   |   |   |   |   |
| Net      (loss) earnings                                                            |   | $              | (3,131  | ) |   | $ | 2,623 |   |
|                                                                                |   |           |    |   |   |   |   |   |
|                                                                                |   |           |    |   |   |   |   |   |
|                                                                                |   |           |    |   |   |   |   |   |
| Basic      and diluted earnings per share                                           |   | $              | (.47    | ) |   | $ | 0.40 |   |
|                                                                                |   |           |    |   |   |   |   |   |
| Average      outstanding shares used in per share calculations (in      thousands): |   |           |    |   |   |   |   |   |
| Basic                                                                               |   |           | 6,651   |   |   |   | 6,618 |   |
| Diluted                                                                             |   |           | 6,651   |   |   |   | 6,627 |   |
|                                                                                |   |           |    |   |   |   |   |   |
|                                                                                |   |           |    |   |   |   |   |   |
|                                                                                |   |           |    |   |   |   |   |   |
| Dividends      per share                                                            |   | $              | 0.12    |   |   | $ | 0.12 |   |
|                                                                                |   |           |    |   |   |   |   |   |

----

|                                                            |   | 13 Weeks Ended |    |
|-----------------------------------------------------------------|--------|----------------|---------|
|                                                            |   | 9/26/09        |    |   | 9/27/08 |   |
|                                                            |   |           |    |   |   |   |
| Cash      flows from operating activities:                      |   |           |    |   |   |   |
| Net (loss)earnings                                              |   | $              | (3,131  | ) |   | $ | 2,623 |   |
| Non-cash items      included:                                   |   |           |    |   |   |   |   |   |
| Depreciation                                                    |   |           | 2,253   |   |   |   | 2,356 |   |
| Amortization                                                    |   |           | 313     |   |   |   | 312 |   |
| Net long-term tax      payable                                  |   |           | 2       |   |   |   | 101 |   |
| Deferred taxes                                                  |   |           | 59      |   |   |   | 77 |   |
| Unrealized transaction (gains)      losses                      |   |           | (79     | ) |   |   | (24 | ) |
| Retirement cost      (benefits)                                 |   |           | 971     |   |   |   | (510 | ) |
| Working capital      changes:                                   |   |           |    |   |   |   |   |   |
| Receivables                                                     |   |           | (39     | ) |   |   | (2,231 | ) |
| Inventories                                                     |   |           | 5,355   |   |   |   | (4,364 | ) |
| Other current    assets                                         |   |           | 186     |   |   |   | (617 | ) |
| Other current      liabilities                                  |   |           | (1,343  | ) |   |   | (195 | ) |
| Prepaid pension cost and      other                             |   |           | (138    | ) |   |   | 978 |   |
| Net cash provided by (used in)      operating activities        |   |           | 4,409   |   |   |   | (1,494 | ) |
|                                                            |   |           |    |   |   |   |   |   |
| Cash      flows from investing activities:                      |   |           |    |   |   |   |   |   |
| Additions to plant and      equipment                           |   |           | (2,783  | ) |   |   | (2,968 | ) |
| Proceeds from      investments                                  |   |           | 615     |   |   |   | 3,299 |   |
| Net cash (used in) provided by      investing activities        |   |           | (2,168  | ) |   |   | 331 |   |
|                                                            |   |           |    |   |   |   |   |   |
| Cash      flows from financing activities:                      |   |           |    |   |   |   |   |   |
| Proceeds from short-term      borrowings                        |   |           | 11,887  |   |   |   | 4,036 |   |
| Short-term debt      repayments                                 |   |           | (14,887 | ) |   |   | (420 | ) |
|     Proceeds      from long-term borrowings |   |           | 129     |   |   |   | - |   |
| Long-term debt      repayments                                  |   |           | (171    | ) |   |   | (134 | ) |
| Common stockissued                                              |   |           | 162     |   |   |   | 156 |   |
| Dividends paid                                                  |   |           | (799    | ) |   |   | (794 | ) |
| Net cash (used in) provided by      financing activities        |   |           | (3,679  | ) |   |   | 2,844 |   |
|                                                            |   |           |    |   |   |   |   |   |
| Effect      of exchange rate changes on cash                    |   |           | 121     |   |   |   | (514 | ) |
|                                                            |   |           |    |   |   |   |   |   |
| Net      (decrease) increase in cash                            |   |           | (1,317  | ) |   |   | 1,167 |   |
| Cash,      beginning of period                                  |   |           | 10,248  |   |   |   | 6,515 |   |
| Cash,      end of period                                        |   |           | 8,931   |   |   | $ | 7,682 |   |
|                                                            |   |           |    |   |   |   |   |   |

----

|                                                                                                                                                                               |   | Sept.      262009(unaudited) |    |   | June      27 2009 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|--------|-------------------|--------|
| ASSETS                                                                                                                                                                             |   |                         |    |   |              |   |
| Current      assets:                                                                                                                                                               |   |                         |    |   |              |   |
| Cash                                                                                                                                                                               |   | $                            | 8,931   |   |              | $      | 10,248 |   |
| Investments                                                                                                                                                                        |   |                         | 1,260   |   |              |   | 1,791 |   |
| Accounts receivable (less      allowance for doubtful accounts of $493 and $678)                                                                                                   |   |                         | 28,108  |   |              |   | 27,233 |   |
| Inventories:                                                                                                                                                                       |   |                         |    |   |              |   |   |   |
| Raw materials and      supplies                                                                                                                                                    |   |                         | 19,082  |   |              |   | 19,672 |   |
| Goods in process and finished      parts                                                                                                                                           |   |                         | 19,070  |   |              |   | 20,265 |   |
| Finished goods                                                                                                                                                                     |   |                         | 17,763  |   |              |   | 20,289 |   |
|                                                                                                                                                                               |   |                         | 55,915  |   |              |   | 60,226 |   |
| Current deferred income tax      asset                                                                                                                                             |   |                         | 5,135   |   |              |   | 5,170 |   |
| Prepaid expenses, taxes and other      current assets                                                                                                                              |   |                         | 8,108   |   |              |   | 8,054 |   |
| Total current    assets                                                                                                                                                            |   |                         | 107,457 |   |              |   | 112,722 |   |
|                                                                                                                                                                               |   |                         |    |   |              |   |   |   |
| Property,      plant and equipment, at cost (less accumulated depreciation      of  $125,664 and $122,856)                                                               |   |                         | 58,178  |   |              |   | 56,956 |   |
| Property      held for sale                                                                                                                                                        |   |                         | 2,771   |   |              |   | 2,771 |   |
| Intangible      assets (less accumulated amortization of $4,037 and$3,724)                                                                                                         |   |                         | 2,204   |   |              |   | 2,517 |   |
| Goodwill                                                                                                                                                                           |   |                         | 981     |   |              |   | 981 |   |
| Other      assets                                                                                                                                                                  |   |                         | 243     |   |              |   | 275 |   |
| Long-term      taxes receivable                                                                                                                                                    |   |                         | 2,807   |   |              |   | 2,807 |   |
| Long-term      deferred income tax asset                                                                                                                                           |   |                         | 15,240  |   |              |   | 15,212 |   |
| Total assets                                                                                                                                                                       |   | $                            | 189,881 |   |              | $      | 194,241 |   |
|                                                                                                                                                                               |   |                         |    |   |              |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                                                                                          |   |                         |    |   |              |   |   |   |
| Current      liabilities:                                                                                                                                                          |   |                         |    |   |              |   |   |   |
| Notes payable and current      maturities                                                                                                                                          |   | $                            | 7,396   |   |              | $      | 10,136 |   |
| Accounts payable and accrued      expenses                                                                                                                                         |   |                         | 9,975   |   |              |   | 10,369 |   |
| Accrued salaries and      wages                                                                                                                                                    |   |                         | 4,387   |   |              |   | 5,109 |   |
| Total current      liabilities                                                                                                                                                     |   |                         | 21,758  |   |              |   | 25,614 |   |
|                                                                                                                                                                               |   |                         |    |   |              |   |   |   |
| Long-term      taxes payable                                                                                                                                                       |   |                         | 9,235   |   |              |   | 9,140 |   |
| Long-term      debt                                                                                                                                                                |   |                         | 1,207   |   |              |   | 1,264 |   |
| Postretirement      benefit and pension liability                                                                                                                                  |   |                         | 16,066  |   |              |   | 15,345 |   |
| Total liabilities                                                                                                                                                                  |   |                         | 48,266  |   |              |   | 51,363 |   |
|                                                                                                                                                                               |   |                         |    |   |              |   |   |   |
| Stockholders'      equity:                                                                                                                                                         |   |                         |    |   |              |   |   |   |
| Class      A Common $1 par (20,000,000 shrs. authorized)    5,797,413      outstanding on 9/26/09    5,769,894      outstanding on 6/27/09 |   |                         | 5,797   |   |              |   | 5,770 |   |
| Class      B Common $1 par (10,000,000 shrs. authorized)    861,636      outstanding on 9/26/09,    869,426      outstanding on 6/27/09    |   |                         | 862     |   |              |   | 869 |   |
| Additional paid-in      capital                                                                                                                                                    |   |                         | 50,141  |   |              |   | 49,984 |   |
| Retained earnings reinvested      and employed in the business                                                                                                                     |   |                         | 123,777 |   |              |   | 127,707 |   |
| Accumulated other comprehensive      loss                                                                                                                                          |   |                         | (38,962 | )      |              |   | (41,452 | ) |
| Total stockholders'      equity                                                                                                                                                    |   |                         | 141,615 |   |              |   | 142,878 |   |
| Total liabilities and      stockholders’ equity                                                                                                                              |   | $                            | 189,881 |   |              | $      | 194,241 |   |

----

|                                                                    |   | Common      Stock Out-standing($1      Par) |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |
|-------------------------------------------------------------------------|--------|--------------------------------------------------|--------|--------|--------------|--------|--------|---------------------------|--------|--------|------------------------|--------|--------|------------------------------------------------|---------|
|                                                                    |   | Class      A                                     |   |   | Class      B |   |   | Addi-tionalPaid-inCapital |   |   | Retained      Earnings |   |   | AccumulatedOther      Com-prehensive      Loss |    |   | Total |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |
| Balance      June 28, 2008                                              |   | $                                                | 5,708  |   |         | $      | 906    |                      |   | $      | 49,613                 |   |   | $                                              | 134,109 |   |   | $ | (3,563 | ) |   | $ | 186,773 |   |
| Comprehensive      income (loss):                                       |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Net earnings                                                            |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           | 2,623   |   |   |   |   |   |   |   | 2,623 |   |
| Unrealized net gain on investments      and      swap agreement         |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | 39 |   |   |   | 39 |   |
| Translation loss,    net                                                |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | (3,044 | ) |   |   | (3,044 | ) |
| Total      comprehensive (loss)                                         |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   | (382 | ) |
| Dividends      ($.12 per share)                                         |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           | (794    | ) |   |   |   |   |   |   | (794 | ) |
| Treasury      shares:                                                   |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Purchased                                                               |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Issued                                                                  |   |                                             | 7      |   |         |   |   |                      |   |   | 149                    |   |   |                                           |    |   |   |   |   |   |   |   | 156 |   |
| Issuance      of stock under ESPP                                       |   |                                             |   |   |         |   |   |                      |   |   | 15                     |   |   |                                           |    |   |   |   |   |   |   |   | 15 |   |
| Conversion                                                              |   |                                             | 18     |   |         |   | (18    | )                         |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   | - |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Balance      September 27, 2008                                         |   | $                                                | 5,733  |   |         | $      | 888    |                      |   | $      | 49,777                 |   |   | $                                              | 135,938 |   |   | $ | (6,568 | ) |   | $ | 185,768 |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Balance      June 27, 2009                                              |   | $                                                | 5,770  |   |         | $      | 869    |                      |   | $      | 49,984                 |   |   | $                                              | 127,707 |   |   | $ | (41,452 | ) |   | $ | 142,878 |   |
| Comprehensive      income (loss):                                       |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Net (loss)                                                              |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           | (3,131  | ) |   |   |   |   |   |   | (3,131 | ) |
| Unrealized net gain on      investments                                 |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | 9 |   |   |   | 9 |   |
| Translation gain,    net                                                |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | 2,481 |   |   |   | 2,481 |   |
| Total      comprehensive (loss)                                         |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   | (641 | ) |
| Dividends      ($0.12 per share)                                        |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           | (799    | ) |   |   |   |   |   |   | (799 | ) |
| Treasury      shares:                                                   |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Purchased                                                               |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Issued                                                                  |   |                                             | 20     |   |         |   |   |                      |   |   | 142                    |   |   |                                           |    |   |   |   |   |   |   |   | 162 |   |
| Issuance      of stock under ESPP                                       |   |                                             |   |   |         |   |   |                      |   |   | 15                     |   |   |                                           |    |   |   |   |   |   |   |   | 15 |   |
| Conversion                                                              |   |                                             | 7      |   |         |   | (7     | )                         |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   | - |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Balance      September 26, 2009                                         |   | $                                                | 5,797  |   |         | $      | 862    |                      |   | $      | 50,141                 |   |   | $                                              | 123,777 |   |   | $ | (38,962 | ) |   | $ | 141,615 |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Cumulative      Balance:                                                |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Translation loss                                                        |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | (11,337 | ) |   |   |   |   |
| Unrealized gain on investments and      swap agreements                 |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | 7 |   |   |   |   |   |
| Amounts not recognized as a      component of net periodic benefit cost |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | (27,632 | ) |   |   |   |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   | $ | (38,962 | ) |   |   |   |   |

----

| 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). |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Level      2 – Financial assets whose values are based on quoted market prices in      markets where trading occurs infrequently or whose values are based on      quoted prices of instruments with similar attributes in active markets.      The Company does not have any Level 2 financial assets as of September 26,      2009. |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Level      3 – Financial assets whose values are based on prices or valuation      techniques that require inputs that are both unobservable and significant      to the overall fair value measurement. These inputs reflect management’s      own estimate about the assumptions a market participant would use in      pricing the asset. The Company does not have any Level 3 financial assets      as of September 26, 2009. |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                     |   | Level 1 |   |
|----------------------------------------------------------|--------|---------|--------|
| International      Bonds (Puerto Rican debt obligations) |   |    | 1,260  |   |
|                                                     |   | $       | 1,260  |   |

----

|                         |   | As of September 26, 2009 |   |   | As of June 27, 2009 |   |
|------------------------------|--------|--------------------------|--------|--------|--------------------------|--------|
|                         |   | Carrying Amount          |   |   | Accumulated Amortization |   |   | Net |   |   | Carrying Amount |   |   | Accumulated Amortization |   |   | Net |   |
|                         |   |                     |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Goodwill                     |   | $                        | 981    |   |                     |   | - |   |   | $ | 981 |   |   | $ | 981 |   |   |   | - |   |   | $ | 981 |   |
|                         |   |                     |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Intangible Assets |   | $                        | 6,241  |   |                     | $      | (4,037 | ) |   | $ | 2,204 |   |   | $ | 6,241 |   |   | $ | (3,724 | ) |   | $ | 2,517 |   |

|                                                              |   | Thirteen WeeksEnded September |   |
|-------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                              |   | 2009                          |   |   | 2008 |   |
|                                                              |   |                          |   |   |   |   |
| Interest income                                                   |   | $                             | 70     |   |   | $ | 317 |   |
| Interest expense and commitment      fees                         |   |                          | (146   | ) |   |   | (182 | ) |
| Realized and unrealized foreign      exchange (losses) gains, net |   |                          | (237   | ) |   |   | 430 |   |
| Other                                                             |   |                          | (75    | ) |   |   | (30 | ) |
| Other (expense)      income                                       |   | $                             | (388   | ) |   | $ | 535 |   |
|  7.      Income Taxes                                        |   |                          |   |   |   |   |   |   |

----

|                                    |   | Thirteen WeeksEnded September |   |
|-----------------------------------------|--------|-------------------------------|--------|
|                                    |   | 2009                          |   |   | 2008 |   |
|                                    |   |                          |   |   |   |   |
| Service cost                            |   | $                             | 487    |   |   | $ | 573 |   |
| Interest cost                           |   |                          | 1,580  |   |   |   | 1,784 |   |
| Expected return on plan      assets     |   |                          | (1,789 | ) |   |   | (2,636 | ) |
| Amort. of transition      obligation    |   |                          | -      |   |   |   | - |   |
| Amort. of prior service      cost       |   |                          | 96     |   |   |   | 110 |   |
| Amort. of unrecognized loss      (gain) |   |                          | 702    |   |   |   | (3 | ) |
|                                    |   | $                             | 1,076  |   |   | $ | (172 | ) |
|                                    |   |                          |   |   |   |   |   |   |

|                              |   | Thirteen WeeksEnded September |   |
|-----------------------------------|--------|-------------------------------|--------|
|                              |   | 2009                          |   |   | 2008 |   |
|                              |   |                          |   |   |   |   |
| Service cost                      |   | $                             | 85     |   |   | $ | 88 |   |
| Interest cost                     |   |                          | 169    |   |   |   | 177 |   |
| Amort. of prior service      cost |   |                          | (226   | ) |   |   | (226 | ) |
| Amort. of unrecognized      loss  |   |                          | -      |   |   |   | - |   |
|                              |   | $                             | 28     |   |   | $ | 39 |   |
|                              |   |                          |   |   |   |   |   |   |

|                                                                                             |   | Sept.      26,2009 |   |   | June      27,2009 |   |
|--------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                                                             |   |               |   |   |              |   |
| Capitalized lease      obligations-domestic (payable in US dollars)                              |   | $                  | 1,147  |   |              | $      | 1,077 |   |
| Capitalized      lease obligations payable in Brazilian currency due 2009-2011,      10.7%-23.1% |   |               | 712    |   |              |   | 811 |   |
|                                                                                             |   |               | 1,859  |   |              |   | 1,888 |   |
| Less current      portion                                                                        |   |               | 652    |   |              |   | 624 |   |
|                                                                                             |   | $                  | 1,207  |   |              | $      | 1,264 |   |

----

----

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

| o   | Long      term investments |
|---------------|----------------------------|

| o   | Long      term debt |
|---------------|---------------------|

| o   | Foreign      currency contracts |
|---------------|---------------------------------|

|                            |   | September      26,2009 |   |   | June      27,2009 |   |
|---------------------------------|--------|------------------------|--------|--------|-------------------|--------|
|                            |   | Carrying      Amount   |   |   | Fair      Value   |   |   | Carrying      Amount |   |   | Fair      Value |   |
| Cash                            |   | $                      | 8,931  |   |              | $      | 8,931 |   |   | $ | 10,248 |   |   | $ | 10,248 |   |
| Investments                     |   |                   | 1,260  |   |              |   | 1,260 |   |   |   | 1,791 |   |   |   | 1,791 |   |
| Foreign      currency contracts |   |                   | -      |   |              |   | (248 | ) |   |   | - |   |   |   | 273 |   |

----

| Cash      flows (in thousands)                       |   | 13 Weeks Ended |   |
|------------------------------------------------------|--------|----------------|--------|
|                                                 |   | 9/26/09        |   |   | 9/27/08 |   |
|                                                 |   |           |   |   |   |   |
| Cash provided by (used in)      operations           |   | $              | 4,409  |   |   | $ | (1,494 | ) |
| Cash (used in) provided by      investing activities |   |           | (2,168 | ) |   |   | 331 |   |
| Cash (used in) provided by      financing activities |   |           | (3,679 | ) |   |   | 2,844 |   |
|                                                 |   |           |   |   |   |   |   |   |

----

| Level  |   | Leverage      Ratio |                                                | Margin |   |
|--------|--------|---------------------|-----------------------------------------------------|--------|--------|
|   | 1      |                | Less      than 1.00                                 |   |   | 1.50 | % |
|   | 2      |                | 1.00      to 2.00                                   |   |   | 1.75 | % |
|   | 3      |                | Greater      than 2.00 and up to and including 2.50 |   |   | 2.00 | % |
|   | 4      |                | Greater      than 2.50                              |   |   | 2.25 | % |

----

----

----

| o   | The      Company hired a new Chief Financial Officer, effective as of November 5,      2009 |
|---------------|---------------------------------------------------------------------------------------------|

| o   | The      Company is in the process of enhancing its accounting policies and      procedures for subsidiaries |
|---------------|--------------------------------------------------------------------------------------------------------------|

| o   | The      Company has affirmed subsidiaries’ responsibility to the Corporate Finance      Group |
|---------------|------------------------------------------------------------------------------------------------------|

| o   | The      Company is working on improved subsidiary and corporate level analysis of      all significant financial statementaccounts |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------|

| o   | The      Company will be working with the new CFO on developing a site visit plan      based on subsidiary risk management consideration and coordinating such      visits with internal audit. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 31a | Certification      of Chief Executive Officer Pursuant to Rules 13a-15(e)/15(d)-15(e) and      13a-15(f)/15(d)-15(f), filedherewith. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------|

|   | 31b | Certification      of Principal Accounting Officer Pursuant to Rules 13a-15(e)/15(d)-15(e)      and 13a-15(f)/15(d)-15(f), filedherewith. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32 | Certification      of Chief Executive Officer and Principal Accounting Officer Pursuant to      Rule 13a-14(b) and Section 906 of the Sarbanes-Oxley Act of 2002      (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United      States Code), filed herewith. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                   |   | THE      L. S. STARRETT COMPANY(Registrant)        |
|--------|------------------------|--------|----------------------------------------------------|
|   |                   |   |                                               |
|   |                   |   |                                               |
| Date   | November      5 , 2009 |   | D.      A. Starrett                                |
|   |                   |   | D.      A. Starrett (President and CEO)            |
|   |                   |   |                                               |
| Date   | November      5, 2009  |   | R.      J. Simkevich                               |
|   |                   |   | R.      J. Simkevich (Principal AccountingOfficer) |

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