|                                                                                                                                                                                                                                                                                                                                                                              | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                              |                                                                                               |
| x                                                                                                                                                                                                                                                                                                                                                                                 | For      the quarterly period ended                                                                | March      27, 2010 |
|                                                                                                                                                                                                                                                                                                                                                                              |                                                                                               |
| 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 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, 2010                                                                                |   |
|                                                                                                                                                                                                                                                                                                                                                                              |                                                                                               |
| Class      A Common Shares                                                                                                                                                                                                                                                                                                                                                        | 5,831,895                                                                                          |   |
|                                                                                                                                                                                                                                                                                                                                                                              |                                                                                               |
| Class      B Common Shares                                                                                                                                                                                                                                                                                                                                                        | 842,056                                                                                            |   |

----

|                                                                                                                                   |   | Page No. |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|----------|
|                                                                                                                                   |   |     |
| Part      I.    Condensed Consolidated Unaudited      Financial Statements:                                        |   |     |
|                                                                                                                                   |   |     |
| Item      1.  Financial      Statements                                                                                           |   |     |
|                                                                                                                                   |   |     |
| Consolidated      Balance Sheets-March      27, 2010 (unaudited) and June 27, 2009                                                     |   | 3        |
|                                                                                                                                   |   |     |
| Consolidated      Statements of Operationsthirteen      and thirty-nine weeks ended March 27, 2010 and March 28, 2009      (unaudited) |   | 4        |
|                                                                                                                                   |   |     |
| Consolidated      Statements of Cash Flows-thirty-nine      weeks ended March 27, 2010 and March 28, 2009 (unaudited)                  |   | 5        |
|                                                                                                                                   |   |     |
| Consolidated      Statements of Stockholders' Equity -Thirty-nine      weeks ended March 27, 2010 and March 28, 2009 (unaudited)       |   | 6        |
|                                                                                                                                   |   |     |
| Notes      to Consolidated Financial Statements                                                                                        |   | 7-10     |
|                                                                                                                                   |   |     |
| Item      2.  Management's Discussion and Analysis of      Financial Condition and Results of Operations                     |   | 10-12    |
|                                                                                                                                   |   |     |
| Item      3.  Quantitative and Qualitative Disclosures About      Market Risk                                                |   | 12       |
|                                                                                                                                   |   |     |
| Item      4.  Controls      and Procedures                                                                                   |   | 12       |
|                                                                                                                                   |   |     |
| Part      II.    Other information:                                                                                |   |     |
|                                                                                                                                   |   |     |
| Item      1A. Risk      Factors                                                                                                   |   | 13       |
|                                                                                                                                   |   |     |
| Item      6.  Exhibits                                                                                                       |   | 13       |
|                                                                                                                                   |   |     |
| SIGNATURES                                                                                                                             |   |     |

----

|                                                                                                                                     |   | March      272010(unaudited) |    |   | June      272009 |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|--------|------------------|--------|
|                                                                                                                                     |   |                         |    |   |             |   |
| ASSETS                                                                                                                                   |   |                         |    |   |             |   |
| Current      assets:                                                                                                                     |   |                         |    |   |             |   |
| Cash                                                                                                                                     |   | $                            | 15,229  |   |             | $      | 10,248 |   |
| Investments                                                                                                                              |   |                         | 1,254   |   |             |   | 1,791 |   |
| Accounts receivable (less      allowance for doubtful accounts of $544 and $678)                                                         |   |                         | 31,733  |   |             |   | 27,233 |   |
| Inventories:                                                                                                                             |   |                         |    |   |             |   |   |   |
| Raw materials and      supplies                                                                                                          |   |                         | 13,004  |   |             |   | 19,672 |   |
| Goods in process and finished      parts                                                                                                 |   |                         | 16,054  |   |             |   | 20,265 |   |
| Finished goods                                                                                                                           |   |                         | 19,113  |   |             |   | 20,289 |   |
|                                                                                                                                     |   |                         | 48,171  |   |             |   | 60,226 |   |
|    Current      deferred income tax asset                                                                                 |   |                         | 4,752   |   |             |   | 5,170 |   |
|    Prepaid      expenses, taxes and other current assets                                                                  |   |                         | 7,994   |   |             |   | 8,054 |   |
| Total current    assets                                                                                                                  |   |                         | 109,133 |   |             |   | 112,722 |   |
|                                                                                                                                     |   |                         |    |   |             |   |   |   |
| Property,      plant and equipment, at cost (less accumulated depreciation of $129,671      and $122,856)                                |   |                         | 57,123  |   |             |   | 56,956 |   |
| Property      held for sale                                                                                                              |   |                         | 2,699   |   |             |   | 2,771 |   |
| Intangible      assets (less accumulated amortization of $4,661 and$3,724)                                                               |   |                         | 1,615   |   |             |   | 2,517 |   |
| Goodwill                                                                                                                                 |   |                         | 1,091   |   |             |   | 981 |   |
| Other      assets                                                                                                                        |   |                         | 744     |   |             |   | 275 |   |
| Long-term      taxes receivable                                                                                                          |   |                         | 2,807   |   |             |   | 2,807 |   |
| Long-term      deferred income tax asset                                                                                                 |   |                         | 16,309  |   |             |   | 15,212 |   |
| Total assets                                                                                                                             |   | $                            | 191,521 |   |             | $      | 194,241 |   |
|                                                                                                                                     |   |                         |    |   |             |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY                                                                                          |   |                         |    |   |             |   |   |   |
| Current      liabilities:                                                                                                                |   |                         |    |   |             |   |   |   |
| Notes payable and current      maturities                                                                                                |   | $                            | 5,226   |   |             | $      | 10,136 |   |
| Accounts payable and accrued      expenses                                                                                               |   |                         | 14,016  |   |             |   | 10,369 |   |
| Accrued salaries and      wages                                                                                                          |   |                         | 4,304   |   |             |   | 5,109 |   |
| Total current      liabilities                                                                                                           |   |                         | 23,546  |   |             |   | 25,614 |   |
|                                                                                                                                     |   |                         |    |   |             |   |   |   |
| Long-term      taxes payable                                                                                                             |   |                         | 8,885   |   |             |   | 9,140 |   |
| Long-term      debt                                                                                                                      |   |                         | 848     |   |             |   | 1,264 |   |
| Postretirement      benefit liability                                                                                                    |   |                         | 17,252  |   |             |   | 15,345 |   |
| Total liabilities                                                                                                                        |   |                         | 50,531  |   |             |   | 51,363 |   |
|                                                                                                                                     |   |                         |    |   |             |   |   |   |
| Stockholders'      equity:                                                                                                               |   |                         |    |   |             |   |   |   |
| Class      A Common $1 par (20,000,000 shares authorized)5,834,888      outstanding on 3/27/10 and5,769,894      outstanding on 6/27/09  |   |                         | 5,835   |   |             |   | 5,770 |   |
| Class      B Common $1 par (10,000,000 shares authorized)839,042      outstanding on 3/27/10 and869,426 outstanding      on 6/27/09 |   |                         | 839     |   |             |   | 869 |   |
| Additional paid-in      capital                                                                                                          |   |                         | 50,304  |   |             |   | 49,984 |   |
| Retained earnings reinvested and      employed in the business                                                                           |   |                         | 122,844 |   |             |   | 127,707 |   |
| Accumulated other comprehensive      loss                                                                                                |   |                         | (38,832 | )      |             |   | (41,452 | ) |
| Total stockholders'      equity                                                                                                          |   |                         | 140,990 |   |             |   | 142,878 |   |
| Total liabilities and      stockholders’ equity                                                                                    |   | $                            | 191,521 |   |             | $      | 194,241 |   |

----

|                                                                                |   | 13 Weeks Ended |   |   | 39 Weeks Ended |   |
|-------------------------------------------------------------------------------------|--------|----------------|--------|--------|----------------|--------|
|                                                                                |   | 3/27/2010      |   |   | 3/28/2009      |   |   | 3/27/2010 |   |   | 3/28/2009 |   |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |
| Net      sales                                                                      |   | $              | 48,643 |   |           | $      | 42,764 |   |   | $ | 139,751 |   |   | $ | 164,830 |   |
| Cost      of goods sold                                                             |   |           | 33,110 |   |           |   | 31,628 |   |   |   | 98.285 |   |   |   | 116,186 |   |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Gross      Margin                                                                   |   |           | 15,533 |   |           |   | 11,136 |   |   |   | 41,466 |   |   |   | 48,644 |   |
|      %      of Net Sales                                   |   |           | 31.9   | %      |           |   | 26.0 | % |   |   | 29.7 | % |   |   | 29.5 | % |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and general expense                                                    |   |           | 14,600 |   |           |   | 13,190 |   |   |   | 43,312 |   |   |   | 46,181 |   |
| Goodwill      impairment                                                            |   |           | 0      |   |           |   | 5,260 |   |   |   | 0 |   |   |   | 5,260 |   |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Income (loss)                                                        |   |           | 933    |   |           |   | (7,314 | ) |   |   | (1,846 | ) |   |   | (2,797 | ) |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Other      income (expense)                                                         |   |           | 108    |   |           |   | (201 | ) |   |   | (534 | ) |   |   | 1,154 |   |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      (loss) before income taxes                                            |   |           | 1,041  |   |           |   | (7,515 | ) |   |   | (2,380 | ) |   |   | (1,643 | ) |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Income      tax expense (benefit)                                                   |   |           | 862    |   |           |   | (2,765 | ) |   |   | 884 |   |   |   | (651 | ) |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Net      (loss) earnings                                                            |   | $              | 179    |   |           | $      | (4,750 | ) |   | $ | (3,264 | ) |   | $ | (992 | ) |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted earnings (loss) earnings per share                           |   | $              | .03    |   |           | $      | (0.72 | ) |   | $ | (0.49 | ) |   | $ | (0.15 | ) |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Average      outstanding shares used in per share calculations (in      thousands): |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
|   Basic                                                                   |   |           | 6,673  |   |           |   | 6,622 |   |   |   | 6,663 |   |   |   | 6,619 |   |
|   Diluted                                                                 |   |           | 6,687  |   |           |   | 6,622 |   |   |   | 6,663 |   |   |   | 6,619 |   |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      per share                                                            |   | $              | 0.06   |   |           | $      | 0.12 |   |   | $ | 0.24 |   |   | $ | 0.36 |   |

----

|                                                                        |   | 39 Weeks Ended |    |
|-----------------------------------------------------------------------------|--------|----------------|---------|
|                                                                        |   | 3/27/2010      |    |   | 3/28/2009 |   |
|                                                                        |   |           |    |   |   |   |
| Cash      flows from operating activities:                                  |   |           |    |   |   |   |
| Net loss                                                                    |   | $              | (3,264  | ) |   | $ | (992 | ) |
| Non-cash items      included:                                               |   |           |    |   |   |   |   |   |
| Depreciation                                                                |   |           | 6,795   |   |   |   | 6,569 |   |
| Amortization                                                                |   |           | 902     |   |   |   | 936 |   |
| Goodwill    impairment                                                      |   |           | 0       |   |   |   | 5,260 |   |
|        Fixed      asset impairment       |   |           | 130     |   |   |   | 0 |   |
| Net long-term tax      payable                                              |   |           | (453    | ) |   |   | 328 |   |
| Deferred taxes                                                              |   |           | (623    | ) |   |   | (3,654 | ) |
| Unrealized transaction (gains)      losses                                  |   |           | (222    | ) |   |   | 1,336 |   |
| Retirement    benefits                                                      |   |           | 2,229   |   |   |   | (1,477 | ) |
| Working capital      changes                                                |   |           |    |   |   |   |   |   |
| Receivables                                                                 |   |           | (4,441  | ) |   |   | 3,336 |   |
| Inventories                                                                 |   |           | 13,855  |   |   |   | (12,032 | ) |
| Other current    assets                                                     |   |           | 510     |   |   |   | (1,145 | ) |
| Other current      liabilities                                              |   |           | 2,474   |   |   |   | (5,295 | ) |
| Prepaid pension cost and      other                                         |   |           | (116    | ) |   |   | 1,963 |   |
| Net cash provided by (used in)      operating activities                    |   |           | 17,776  |   |   |   | (4,867 | ) |
|                                                                        |   |           |    |   |   |   |   |   |
| Cash      flows from investing activities:                                  |   |           |    |   |   |   |   |   |
|   Additions to plant and      equipment                           |   |           | (5,914  | ) |   |   | (7,840 | ) |
|   Decrease in      investments                                    |   |           | 618     |   |   |   | 8,483 |   |
|      Earn      out paid for Kinemetric Engineering |   |           | (110    | ) |   |   | (208 | ) |
| Net cash (used in) provided by      investing activities                    |   |           | (5,406  | ) |   |   | 435 |   |
|                                                                        |   |           |    |   |   |   |   |   |
| Cash      flows from financing activities:                                  |   |           |    |   |   |   |   |   |
|   Proceeds from      short-term borrowings                        |   |           | 13,982  |   |   |   | 16,135 |   |
|  Short-term debt      repayments                                       |   |           | (19,233 | ) |   |   | (5,702 | ) |
|  Proceeds from long-term      borrowings                               |   |           | 129     |   |   |   | 1,188 |   |
|  Long-term debt      repayments                                        |   |           | (523    | ) |   |   | (335 | ) |
|  Proceeds from common stock      issued                                |   |           | 305     |   |   |   | 470 |   |
|  Treasury shares      purchased                                        |   |           | 0       |   |   |   | (263 | ) |
|  Dividends    paid                                                     |   |           | (1,599  | ) |   |   | (2,384 | ) |
| Net cash (used in) provided by      financing activities                    |   |           | (6,939  | ) |   |   | 9,109 |   |
|                                                                        |   |           |    |   |   |   |   |   |
| Effect      of exchange rate changes on cash                                |   |           | (450    | ) |   |   | (1,998 | ) |
|                                                                        |   |           |    |   |   |   |   |   |
| Net      increase in cash                                                   |   |           | 4,981   |   |   |   | 2,679 |   |
| Cash,      beginning of period                                              |   |           | 10,248  |   |   |   | 6,515 |   |
| Cash,      end of period                                                    |   | $              | 15,229  |   |   | $ | 9,194 |   |

----

|                                                                    |   | Common      Stock Out-standing($1      Par) |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |
|-------------------------------------------------------------------------|--------|--------------------------------------------------|--------|--------|--------------|--------|--------|---------------------------|--------|--------|------------------|--------|--------|------------------------------------------|---------|
|                                                                    |   | Class      A                                     |   |   | Class      B |   |   | Addi-tionalPaid-inCapital |   |   | RetainedEarnings |   |   | AccumulatedOther      Com-prehensiveLoss |    |   | Total |   |
| Balance      June 28, 2008                                              |   | $                                                | 5,708  |   |         | $      | 906    |                      |   | $      | 49,613           |   |   | $                                        | 134,109 |   |   | $ | (3,563 | ) |   | $ | 186,773 |   |
| Comprehensive      income (loss):                                       |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   |   |   |   |   |   |   |   |
|   Net      loss                                               |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     | (992    | ) |   |   |   |   |   |   | (992 | ) |
|   Unrealized net gain      on investments and swap agreement  |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   |   | 312 |   |   |   | 312 |   |
| Translation loss,      net                                              |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   |   | (24,574 | ) |   |   | (24,574 | ) |
| Dividends      ($.36 per share)                                         |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     | (2,384  | ) |   |   |   |   |   |   | (2,384 | ) |
| Treasury      shares:                                                   |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Purchased                                                               |   |                                             | (26    | )      |         |   |   |                      |   |   | (237             | )      |   |                                     |    |   |   |   |   |   |   |   | (263 | ) |
| Issued                                                                  |   |                                             | 28     |   |         |   |   |                      |   |   | 393              |   |   |                                     |    |   |   |   |   |   |   |   | 421 |   |
| Issuance      of stock under ESPP                                       |   |                                             |   |   |         |   | 4      |                      |   |   | 96               |   |   |                                     |    |   |   |   |   |   |   |   | 100 |   |
| Conversion                                                              |   |                                             | 36     |   |         |   | (36    | )                         |   |   |             |   |   |                                     |    |   |   |   |   |   |   |   | 0 |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Balance      March 28,2009                                              |   | $                                                | 5,746  |   |         | $      | 874    |                      |   | $      | 49,865           |   |   | $                                        | 130,733 |   |   | $ | (27,825 | ) |   | $ | 159,393 |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   |   |   |   |   |   |   |   |
| 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 gain,      net                                              |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   |   | 2,615 |   |   |   | 2,615 |   |
| Dividends      ($0.24 per share)                                        |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     | (1,599  | ) |   |   |   |   |   |   | (1,599 | ) |
| Treasury      shares:                                                   |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   |   |   |   |   |   |   |   |
|       Issued                              |   |                                             | 33     |   |         |   |   |                      |   |   | 261              |   |   |                                     |    |   |   |   |   |   |   |   | 294 |   |
| Issuance      of stock under ESPP                                       |   |                                             |   |   |         |   | 2      |                      |   |   | 59               |   |   |                                     |    |   |   |   |   |   |   |   | 61 |   |
| Conversion                                                              |   |                                             | 32     |   |         |   | (32    | )                         |   |   |             |   |   |                                     |    |   |   |   |   |   |   |   | 0 |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Balance      March 27, 2010                                             |   | $                                                | 5,835  |   |         | $      | 839    |                      |   | $      | 50,304           |   |   | $                                        | 122,844 |   |   | $ | (38,832 | ) |   | $ | 140,990 |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Cumulative      Balance:                                                |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Translation loss                                                        |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   |   | (11,203 | ) |   |   |   |   |
| Unrealized gain on      investments                                     |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   |   | 3 |   |   |   |   |   |
| Amounts      not recognized as a component of net periodic benefit cost |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   |   | (27,632 | ) |   |   |   |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                     |    |   |   | $ | (38,832 | ) |   |   |   |   |

----

| 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 |
|--------------------------------------------------------------------------------------------------|--------------|
|        International      Bonds Puerto Rican debt obligations | $1,254       |

----

|                                          |   | Thirteen WeeksEnded March |   |   | Thirty-nine WeeksEnded March |   |
|-----------------------------------------------|--------|---------------------------|--------|--------|------------------------------|--------|
|                                          |   | 2010                      |   |   | 2009                         |   |   | 2010 |   |   | 2009 |   |
|                                          |   |                      |   |   |                         |   |   |   |   |   |   |   |
| Service      cost                             |   | $                         | 484    |   |                         | $      | 541 |   |   | $ | 1,457 |   |   | $ | 1,670 |   |
| Interest      cost                            |   |                      | 1,567  |   |                         |   | 1,639 |   |   |   | 4,720 |   |   |   | 5,133 |   |
| Expected      return on plan assets           |   |                      | (1,775 | )      |                         |   | (2,490 | ) |   |   | (5,346 | ) |   |   | (7,686 | ) |
| Amortization      of prior service cost       |   |                      | 95     |   |                         |   | 100 |   |   |   | 288 |   |   |   | 314 |   |
| Amortization      of unrecognized loss (gain) |   |                      | 701    |   |                         |   | (3 | ) |   |   | 2,104 |   |   |   | (8 | ) |
|                                          |   | $                         | 1,072  |   |                         | $      | (213 | ) |   | $ | 3,223 |   |   | $ | (577 | ) |

|                                       |   | Thirteen WeeksEnded March |   |   | Thirty-nine WeeksEnded March |   |
|--------------------------------------------|--------|---------------------------|--------|--------|------------------------------|--------|
|                                       |   | 2010                      |   |   | 2009                         |   |   | 2010 |   |   | 2009 |   |
|                                       |   |                      |   |   |                         |   |   |   |   |   |   |   |
| Service      cost                          |   | $                         | 85     |   |                         | $      | 88 |   |   | $ | 254 |   |   | $ | 265 |   |
| Interest      cost                         |   |                      | 169    |   |                         |   | 177 |   |   |   | 508 |   |   |   | 531 |   |
| Amortization      of prior service benefit |   |                      | (226   | )      |                         |   | (226 | ) |   |   | (679 | ) |   |   | (679 | ) |
| Amortization      of unrecognized loss     |   |                      | 0      |   |                         |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|                                       |   | $                         | 28     |   |                         | $      | 39 |   |   | $ | 83 |   |   | $ | 117 |   |

----

|                                    |   | March      27, 2010 |   |   | June      27,2009 |   |
|-----------------------------------------|--------|---------------------|--------|--------|-------------------|--------|
|                                    |   |                |   |   |              |   |
| Loan      and Security Agreement        |   | $                   | 2,000  |   |              |   | 0 |   |
| Revolving      credit facility          |   |                | 0      |   |              | $      | 7,200 |   |
| Short-term      foreign credit facility |   |                | 2,971  |   |              |   | 2,711 |   |
| Other                                   |   |                | 255    |   |              |   | 225 |   |
|                                    |   | $                   | 5,226  |   |              | $      | 10,136 |   |

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

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

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

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

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

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

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

|   | The      fair value of foreign currency contracts is estimated by taking the      difference from the contract exchange rate and the current exchange rate      of the contract and multiplying it by the face value of the      contract. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                            |   | March      27, 2010  |   |   | June      27, 2009 |   |
|---------------------------------|--------|----------------------|--------|--------|--------------------|--------|
|                            |   | Carrying      Amount |   |   | Fair      Value    |   |   | Carrying      Amount |   |   | Fair      Value |   |
|                            |   |                 |   |   |               |   |   |   |   |   |   |   |
| Cash                            |   | $                    | 15,229 |   |               | $      | 15,229 |   |   | $ | 10,248 |   |   | $ | 10,248 |   |
| Investments                     |   |                 | 1,254  |   |               |   | 1,254 |   |   |   | 1,791 |   |   |   | 1,791 |   |
| Foreign      currency contracts |   |                 | 0      |   |               |   | 0 |   |   |   | 0 |   |   |   | 273 |   |
| Long      term debt             |   |                 | 848    |   |               |   | 848 |   |   |   | 1,264 |   |   |   | 1,264 |   |

----

| Cash      flows (in thousands)                         |   | Thirty-nine Weeks |   |
|--------------------------------------------------------|--------|-------------------|--------|
|                                                   |   | 3/27/2010         |   |   | 3/28/2009 |   |
|                                                   |   |              |   |   |   |   |
| Cash provided by (used in)      operations             |   | $                 | 17,776 |   |   | $ | (4,867 | ) |
| Cash (used in) provided from      investing activities |   |              | (5,406 | ) |   |   | 435 |   |
| Cash (used in) provided from      financing activities |   |              | (6,939 | ) |   |   | 9,109 |   |
| Effect of exchange rates changes      on cash          |   |              | (450   | ) |   |   | (1,998 | ) |
|                                                   |   |              |   |   |   |   |   |   |
| Net increase (decrease) in      cash                   |   | $                 | 4,981  |   |   | $ | 2,679 |   |

----

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

| o   | The      Company has completed an enhanced accounting policies and procedures      manual |
|---------------|-------------------------------------------------------------------------------------------|

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

| o   | The      Company is developing an improved financial reporting framework which will      facilitate a uniform approach to consolidated and subsidiary financial      analysis.  This project is scheduled to be completed in the      fourth quarter. |
|---------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   |  The      new CFO visited our Brazil subsidiary in April and plans to visit our      Scotland operation this summer.  Additional visits to      international and domestic subsidiaries are planned for fiscal      2011. |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 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   | May      6, 2010 |   | S/R.      Douglas A. Starrett                     |
|   |             |   | Douglas      A. Starrett - President and CEO      |
|   |             |   |                                              |
| Date   | May      6, 2010 |   | S/R.      Francis J. O’Brien                |
|   |             |   | Francis      J. O’Brien - Treasurer and CFO |

----