|                                                                                                                                                                                                                                                                                                                                                                                | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                |                                                                                               |
|        x                                                                                                                                                                                                                                                                                                                                                                       | For      the quarterly period ended                                                                | March      29, 2008 |
|                                                                                                                                                                                                                                                                                                                                                                                |                                                                                               |
| 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, 2008                                                                                |   |
|                                                                                                                                                                                                                                                                                                                                                                                |                                                                                               |
| Class      A Common Shares                                                                                                                                                                                                                                                                                                                                                          | 5,687,206                                                                                          |   |
|                                                                                                                                                                                                                                                                                                                                                                                |                                                                                               |
| Class      B Common Shares                                                                                                                                                                                                                                                                                                                                                          | 916,606                                                                                            |   |

----

|                                                                                                                                                 |   | Page No. |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|
|                                                                                                                                                 |   |     |
| Part      I.    Financial      Information:                                                                                      |   |     |
|                                                                                                                                                 |   |     |
| Item      1.    Financial Statements                                                                                             |   |     |
|                                                                                                                                                 |   |     |
| Consolidated      Statements of Operations –thirteen      weeks and thirty-nine weeks ended March 29, 2008 and March 24, 2007      (unaudited) |   | 3        |
|                                                                                                                                                 |   |     |
| Consolidated      Statements of Cash Flows –thirteen      and thirty-nine weeks ended March 29, 2008 and March 24, 2007      (unaudited)       |   | 4        |
|                                                                                                                                                 |   |     |
| Consolidated      Balance Sheets –March      29, 2008 (unaudited) and June 30, 2007                                                            |   | 5        |
|                                                                                                                                                 |   |     |
| Consolidated      Statements of Stockholders' Equity -thirty-nine      weeks ended March 29, 2008 and March 24, 2007 (unaudited)                     |   | 6        |
|                                                                                                                                                 |   |     |
| Notes      to Consolidated Financial Statements                                                                                                      |   | 7-9      |
|                                                                                                                                                 |   |     |
| Item      2.     Management's Discussion and Analysis of      Financial Condition and Results of Operations                 |   | 9-13     |
|                                                                                                                                                 |   |     |
| Item      3.     Quantitative and Qualitative Disclosures      About Market Risk                                            |   | 14       |
|                                                                                                                                                 |   |     |
| Item      4.     Controls and Procedures                                                                                    |   | 14       |
|                                                                                                                                                 |   |     |
| Part      II.  Other information:                                                                                                          |   |     |
|                                                                                                                                                 |   |     |
| Item      1A.  Risk Factors                                                                                                                |   | 14-16    |
|                                                                                                                                                 |   |     |
| Item      2.      Unregistered Sales of Equity      Securities and Use of Proceeds                                     |   | 16       |
|                                                                                                                                                 |   |     |
| Item      3, 4, 5  Not Applicable                                                                                                          |   | 16       |
|                                                                                                                                                 |   |     |
| Item      6.      Exhibits                                                                                             |   | 16       |
|                                                                                                                                                 |   |     |
| SIGNATURES                                                                                                                                           |   | 16       |

----

|                                                                                |   | 13 Weeks Ended |    |   | 39 Weeks Ended |   |
|-------------------------------------------------------------------------------------|--------|----------------|---------|--------|----------------|--------|
|                                                                                |   | 3/29/08        |    |   | 3/24/07        |   |   | 3/29/08 |   |   | 3/24/07 |   |
|                                                                                |   |           |    |   |           |   |   |   |   |   |   |   |
| Net      sales                                                                      |   | $              | 60,101  |   |           | $      | 54,448 |   |   | $ | 182,087 |   |   | $ | 162,650 |   |
| Cost      of goods sold                                                             |   |           | (41,041 | )      |           |   | (38,329 | ) |   |   | (124,929 | ) |   |   | (116,658 | ) |
| Selling      and general expense                                                    |   |           | (15,237 | )      |           |   | (13,782 | ) |   |   | (45,706 | ) |   |   | (41,083 | ) |
| Other      income (expense)                                                         |   |           | 1,155   |   |           |   | (460 | ) |   |   | 3,051 |   |   |   | (942 | ) |
|                                                                                |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      before income taxes                                                   |   |           | 4,978   |   |           |   | 1,877 |   |   |   | 14,503 |   |   |   | 3,967 |   |
| Income      tax expense                                                             |   |           | 2,116   |   |           |   | 563 |   |   |   | 5,888 |   |   |   | 1,190 |   |
|                                                                                |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Net      earnings                                                                   |   | $              | 2,862   |   |           | $      | 1,314 |   |   | $ | 8,615 |   |   | $ | 2,777 |   |
|                                                                                |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted earnings per share                                           |   | $              | 0.43    |   |           | $      | 0.20 |   |   | $ | 1.30 |   |   | $ | 0.42 |   |
|                                                                                |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Average      outstanding shares used in per share calculations (in      thousands): |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                               |   |           | 6,598   |   |           |   | 6,680 |   |   |   | 6,594 |   |   |   | 6,677 |   |
| Diluted                                                                             |   |           | 6,606   |   |           |   | 6,690 |   |   |   | 6,602 |   |   |   | 6,685 |   |
|                                                                                |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      per share                                                            |   | $              | 0.10    |   |           | $      | 0.10 |   |   | $ | 0.40 |   |   | $ | 0.30 |   |
|                                                                                |   |           |    |   |           |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                       |   | 13 Weeks Ended |   |   | 39 Weeks Ended |   |
|------------------------------------------------------------|--------|----------------|--------|--------|----------------|--------|
|                                                       |   | 3/29/08        |   |   | 3/24/07        |   |   | 3/29/08 |   |   | 3/24/07 |   |
|                                                       |   |           |   |   |           |   |   |   |   |   |   |   |
| Cash      flows from operating activities:                 |   |           |   |   |           |   |   |   |   |   |   |   |
| Net earnings                                               |   | $              | 2,862  |   |           | $      | 1,314 |   |   | $ | 8,615 |   |   | $ | 2,777 |   |
| Non-cash items      included:                              |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Gain from sale of real      estate                         |   |           | -      |   |           |   | - |   |   |   | (1,703 | ) |   |   | (299 | ) |
| Depreciation                                               |   |           | 2,460  |   |           |   | 2,001 |   |   |   | 7,299 |   |   |   | 7,332 |   |
| Impaired Assets                                            |   |           | -      |   |           |   | - |   |   |   | 95 |   |   |   |   |   |
| Amortization                                               |   |           | 312    |   |           |   | 265 |   |   |   | 928 |   |   |   | 838 |   |
| Long-term deferred      taxes                              |   |           | 1,290  |   |           |   | 784 |   |   |   | 2,397 |   |   |   | 708 |   |
| Unrealized transaction (gains)      losses                 |   |           | (399   | )      |           |   | (59 | ) |   |   | (955 | ) |   |   | (202 | ) |
| Retirementbenefits                                         |   |           | (775   | )      |           |   | (380 | ) |   |   | (2,518 | ) |   |   | (1,144 | ) |
| Working capital      changes:                              |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Receivables                                                |   |           | 184    |   |           |   | 2,704 |   |   |   | (546 | ) |   |   | (716 | ) |
| Inventories                                                |   |           | (1,055 | )      |           |   | 693 |   |   |   | 3,757 |   |   |   | 3,121 |   |
| Other current    assets                                    |   |           | 238    |   |           |   | (407 | ) |   |   | 906 |   |   |   | 230 |   |
| Other current      liabilities                             |   |           | (1,415 | )      |           |   | (1,886 | ) |   |   | (684 | ) |   |   | (3,579 | ) |
| Prepaid pension cost and      other                        |   |           | (250   | )      |           |   | 311 |   |   |   | 398 |   |   |   | 281 |   |
|                                                       |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Net cash from operating      activities                    |   |           | 3,452  |   |           |   | 5,340 |   |   |   | 17,989 |   |   |   | 9,347 |   |
|                                                       |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                 |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Additions to plant and      equipment                      |   |           | (2,718 | )      |           |   | (834 | ) |   |   | (6,816 | ) |   |   | (3,356 | ) |
| Proceeds from sale of real      estate                     |   |           | -      |   |           |   | - |   |   |   | 2,416 |   |   |   | 394 |   |
| (Increase) decrease in      investments                    |   |           | 1,045  |   |           |   | (1,677 | ) |   |   | (8,805 | ) |   |   | (585 | ) |
| Purchase of      Kinemetrics                               |   |           | -      |   |           |   | - |   |   |   | (2,060 | ) |   |   | - |   |
|                                                       |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Net cash used in investing      activities                 |   |           | (1,673 | )      |           |   | (2,511 | ) |   |   | (15,265 | ) |   |   | (3,547 | ) |
|                                                       |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                 |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from short-term      borrowings                   |   |           | 475    |   |           |   | 2,115 |   |   |   | 4,956 |   |   |   | 3,443 |   |
| Short-term debt      repayments                            |   |           | (1,507 | )      |           |   | (1,048 | ) |   |   | (5,218 | ) |   |   | (3,585 | ) |
| Proceeds from long-term debt      borrowings               |   |           | -      |   |           |   | 157 |   |   |   | - |   |   |   | 578 |   |
| Long-term debt      repayments                             |   |           | (160   | )      |           |   | - |   |   |   | (384 | ) |   |   | - |   |
| Common stockissued                                         |   |           | 155    |   |           |   | 77 |   |   |   | 423 |   |   |   | 331 |   |
| Treasury shares      purchased                             |   |           | -      |   |           |   | (484 | ) |   |   | (317 | ) |   |   | (519 | ) |
| Dividends                                                  |   |           | (660   | )      |           |   | (666 | ) |   |   | (2,638 | ) |   |   | (2,003 | ) |
|                                                       |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Net cash provided from (used in)      financing activities |   |           | (1,697 | )      |           |   | 151 |   |   |   | (3,178 | ) |   |   | (1,755 | ) |
|                                                       |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Effect      of exchange rate changes on cash               |   |           | 10     |   |           |   | (21 | ) |   |   | 176 |   |   |   | 156 |   |
|                                                       |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Net      increase (decrease) in cash                       |   |           | 92     |   |           |   | 2,959 |   |   |   | (278 | ) |   |   | 4,201 |   |
| Cash,      beginning of period                             |   |           | 7,338  |   |           |   | 5,218 |   |   |   | 7,708 |   |   |   | 3,976 |   |
| Cash,      end of period                                   |   | $              | 7,430  |   |           | $      | 8,177 |   |   | $ | 7,430 |   |   | $ | 8,177 |   |
|                                                       |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                                                                |   | March      29 2008 (unaudited) |    |   | June      30 2007 |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|--------|-------------------|--------|
|                                                                                                                                |   |                           |    |   |              |   |
| ASSETS                                                                                                                              |   |                           |    |   |              |   |
| Current      assets:                                                                                                                |   |                           |    |   |              |   |
| Cash                                                                                                                                |   | $                              | 7,430   |   |              | $      | 7,708 |   |
| Investments                                                                                                                         |   |                           | 23,632  |   |              |   | 14,503 |   |
| Accounts receivable (less      allowance for doubtful accounts of $1,030 and $1,623)                                                |   |                           | 40,518  |   |              |   | 37,314 |   |
| Inventories:                                                                                                                        |   |                           |    |   |              |   |   |   |
| Raw materials and      supplies                                                                                                     |   |                           | 14,016  |   |              |   | 17,130 |   |
| Goods in process and finished      parts                                                                                            |   |                           | 16,810  |   |              |   | 17,442 |   |
| Finished goods                                                                                                                      |   |                           | 25,712  |   |              |   | 22,744 |   |
|                                                                                                                                |   |                           | 56,538  |   |              |   | 57,316 |   |
| Current deferred income tax      asset                                                                                              |   |                           | 4,013   |   |              |   | 3,866 |   |
| Prepaid expenses, taxes and other      current assets                                                                               |   |                           | 4,362   |   |              |   | 4,920 |   |
| Total current    assets                                                                                                             |   |                           | 136,493 |   |              |   | 125,627 |   |
|                                                                                                                                |   |                           |    |   |              |   |   |   |
| Property,      plant and equipment, at cost (less accumulated depreciation of $129,816      and $124,549)                           |   |                           | 60,587  |   |              |   | 58,883 |   |
| Property      held for sale                                                                                                         |   |                           | 1,940   |   |              |   | 2,653 |   |
| Intangible      assets (less accumulated amortization of $2,165 and$1,237)                                                          |   |                           | 4,076   |   |              |   | 4,063 |   |
| Goodwill                                                                                                                            |   |                           | 6,032   |   |              |   | 5,260 |   |
| Pension      asset                                                                                                                  |   |                           | 38,474  |   |              |   | 36,656 |   |
| Other      assets                                                                                                                   |   |                           | 1,052   |   |              |   | 869 |   |
| Long-term      taxes receivable                                                                                                     |   |                           | 1,799   |   |              |   | - |   |
| Total assets                                                                                                                        |   | $                              | 250,453 |   |              | $      | 234,011 |   |
|                                                                                                                                |   |                           |    |   |              |   |   |   |
|                                                                                                                                |   |                           |    |   |              |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                                           |   |                           |    |   |              |   |   |   |
| Current      liabilities:                                                                                                           |   |                           |    |   |              |   |   |   |
| Notes payable and current      maturities                                                                                           |   | $                              | 4,615   |   |              | $      | 4,737 |   |
| Accounts payable and accrued      expenses                                                                                          |   |                           | 18,051  |   |              |   | 16,674 |   |
| Accrued salaries and      wages                                                                                                     |   |                           | 5,253   |   |              |   | 4,869 |   |
| Total current      liabilities                                                                                                      |   |                           | 27,919  |   |              |   | 26,280 |   |
|                                                                                                                                |   |                           |    |   |              |   |   |   |
| Long-term      taxes payable                                                                                                        |   |                           | 7,489   |   |              |   | 4,852 |   |
| Deferred      income taxes                                                                                                          |   |                           | 6,961   |   |              |   | 5,125 |   |
| Long-term      debt                                                                                                                 |   |                           | 8,327   |   |              |   | 8,520 |   |
| Postretirement      benefit liability                                                                                               |   |                           | 10,669  |   |              |   | 11,241 |   |
| Total liabilities                                                                                                                   |   |                           | 61,365  |   |              |   | 56,018 |   |
|                                                                                                                                |   |                           |    |   |              |   |   |   |
| Stockholders'      equity:                                                                                                          |   |                           |    |   |              |   |   |   |
| Class      A Common $1 par (20,000,000 shrs. authorized)5,683,242      outstanding on 3/29/08,5,632,017      outstanding on 6/30/07 |   |                           | 5,683   |   |              |   | 5,632 |   |
| Class      B Common $1 par (10,000,000 shrs. authorized)916,606      outstanding on 3/29/08,962,758      outstanding on 6/30/07     |   |                           | 917     |   |              |   | 963 |   |
| Additional paid-in      capital                                                                                                     |   |                           | 49,417  |   |              |   | 49,282 |   |
| Retained earnings reinvested      and employed in the business                                                                      |   |                           | 133,566 |   |              |   | 127,902 |   |
| Accumulated other comprehensive      loss                                                                                           |   |                           | (495    | )      |              |   | (5,786 | ) |
| Total stockholders'      equity                                                                                                     |   |                           | 189,088 |   |              |   | 177,993 |   |
| Total liabilities and      stockholders’ equity                                                                               |   | $                              | 250,453 |   |              | $      | 234,011 |   |

----

|                                                                    |   | Common      Stock Out-standing($1      Par) |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |
|-------------------------------------------------------------------------|--------|--------------------------------------------------|--------|--------|--------------|--------|--------|---------------------------|--------|--------|------------------|--------|--------|------------------------------------------------|---------|
|                                                                    |   | Class      A                                     |   |   | Class      B |   |   | Addi-tionalPaid-inCapital |   |   | RetainedEarnings |   |   | AccumulatedOther      Com-prehensive      Loss |    |   | Total |   |
| Balance      June 24, 2006                                              |   | $                                                | 5,629  |   |         | $      | 1,040  |                      |   | $      | 50,569           |   |   | $                                              | 123,913 |   |   | $ | (15,909 | ) |   | $ | 165,242 |   |
| Comprehensive      income (loss):                                       |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Net earnings                                                            |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           | 2,777   |   |   |   |   |   |   |   | 2,777 |   |
| Unrealized net loss on investments      andswap agreement               |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   | (52 | ) |   |   | (52 | ) |
| Translation gain,    net                                                |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   | 3,721 |   |   |   | 3,721 |   |
| Total      comprehensive income                                         |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   | 6,446 |   |
| Dividends      ($.30 per share)                                         |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           | (2,003  | ) |   |   |   |   |   |   | (2,003 | ) |
| Treasury      shares:                                                   |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Purchased                                                               |   |                                             | (29    | )      |         |   |   |                      |   |   | (490             | )      |   |                                           |    |   |   |   |   |   |   |   | (519 | ) |
| Issued                                                                  |   |                                             | 18     |   |         |   |   |                      |   |   | 246              |   |   |                                           |    |   |   |   |   |   |   |   | 264 |   |
| Issuance      of stock under ESPP                                       |   |                                             |   |   |         |   | 5      |                      |   |   | 108              |   |   |                                           |    |   |   |   |   |   |   |   | 113 |   |
| Conversion                                                              |   |                                             | 63     |   |         |   | (63    | )                         |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Balance      March 24, 2007                                             |   | $                                                | 5,681  |   |         | $      | 982    |                      |   | $      | 50,433           |   |   | $                                              | 124,687 |   |   | $ | (12,240 | ) |   | $ | 169,543 |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Balance      June 30, 2007                                              |   | $                                                | 5,632  |   |         | $      | 963    |                      |   | $      | 49,282           |   |   | $                                              | 127,902 |   |   | $ | (5,786 | ) |   | $ | 177,993 |   |
| Comprehensive      income (loss):                                       |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Net earnings                                                            |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           | 8,615   |   |   |   |   |   |   |   | 8,615 |   |
| Unrealized net loss on investments      andswap agreement               |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   | (85 | ) |   |   | (85 | ) |
| Translation gain,    net                                                |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   | 5,376 |   |   |   | 5,376 |   |
| Total      comprehensive income                                         |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   | 13,906 |   |
| Tax      adjustment for FIN 48                                          |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           | (313    | ) |   |   |   |   |   |   | (313 | ) |
| Dividends      ($.40 per share)                                         |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           | (2,638  | ) |   |   |   |   |   |   | (2,638 | ) |
| Treasury      shares:                                                   |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Purchased                                                               |   |                                             | (20    | )      |         |   |   |                      |   |   | (297             | )      |   |                                           |    |   |   |   |   |   |   |   | (317 | ) |
| Issued                                                                  |   |                                             | 20     |   |         |   |   |                      |   |   | 322              |   |   |                                           |    |   |   |   |   |   |   |   | 342 |   |
| Issuance      of stock under ESPP                                       |   |                                             |   |   |         |   | 5      |                      |   |   | 110              |   |   |                                           |    |   |   |   |   |   |   |   | 115 |   |
| Conversion                                                              |   |                                             | 51     |   |         |   | (51    | )                         |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   | - |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Balance      March 29, 2008                                             |   | $                                                | 5,683  |   |         | $      | 917    |                      |   | $      | 49,417           |   |   | $                                              | 133,566 |   |   | $ | (495 | ) |   | $ | 189,088 |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Cumulative      Balance:                                                |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Translation loss                                                        |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   | (1,434 | ) |   |   |   |   |
| Unrealized net loss on investments      andswap agreements              |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   | (144 | ) |   |   |   |   |
| Amounts not recognized as a      component of net periodic benefit cost |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   | 1,083 |   |   |   |   |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   | $ | (495 | ) |   |   |   |   |
|                                                                    |   |                                             |   |   |         |   |   |                      |   |   |             |   |   |                                           |    |   |   |   |   |   |   |   |   |   |

----

|                                                 |   | Thirteen WeeksEnded March |   |   | Thirty-nine WeeksEnded March |   |
|------------------------------------------------------|--------|---------------------------|--------|--------|------------------------------|--------|
|                                                 |   | 2008                      |   |   | 2007                         |   |   | 2008 |   |   | 2007 |   |
|                                                 |   |                      |   |   |                         |   |   |   |   |   |   |   |
| Interest income                                      |   | $                         | 356    |   |                         | $      | 331 |   |   | $ | 1,090 |   |   | $ | 913 |   |
| Interest expense and commitment      fees            |   |                      | (108   | )      |                         |   | (528 | ) |   |   | (561 | ) |   |   | (1,398 | ) |
| Realized and unrealized exchange      gains (losses) |   |                      | 708    |   |                         |   | (204 | ) |   |   | 787 |   |   |   | (288 | ) |
| Gains on sale of real      estate                    |   |                      | -      |   |                         |   | - |   |   |   | 1,703 |   |   |   | 299 |   |
| Other                                                |   |                      | 199    |   |                         |   | (59 | ) |   |   | 32 |   |   |   | (468 | ) |
|                                                 |   | $                         | 1,155  |   |                         | $      | (460 | ) |   | $ | 3,051 |   |   | $ | (942 | ) |
|                                                 |   |                      |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |

----

|                                    |   | Thirteen WeeksEnded March |   |   | Thirty-nine WeeksEnded March |   |
|-----------------------------------------|--------|---------------------------|--------|--------|------------------------------|--------|
|                                    |   | 2008                      |   |   | 2007                         |   |   | 2008 |   |   | 2007 |   |
|                                    |   |                      |   |   |                         |   |   |   |   |   |   |   |
| Service cost                            |   | $                         | 597    |   |                         | $      | 597 |   |   | $ | 1,796 |   |   | $ | 1,960 |   |
| Interest cost                           |   |                      | 1,742  |   |                         |   | 1,680 |   |   |   | 5,245 |   |   |   | 5,062 |   |
| Expected return on plan      assets     |   |                      | (2,944 | )      |                         |   | (2,580 | ) |   |   | (8,853 | ) |   |   | (7,745 | ) |
| Amort. of prior service      cost       |   |                      | 111    |   |                         |   | 109 |   |   |   | 335 |   |   |   | 326 |   |
| Amort. of unrecognized (gain)      loss |   |                      | (1     | )      |                         |   | 36 |   |   |   | (5 | ) |   |   | 111 |   |
|                                    |   | $                         | (495   | )      |                         | $      | (158 | ) |   | $ | (1,482 | ) |   | $ | (286 | ) |
|                                    |   |                      |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |

|                              |   | Thirteen WeeksEnded March |   |   | Thirty-nine WeeksEnded March |   |
|-----------------------------------|--------|---------------------------|--------|--------|------------------------------|--------|
|                              |   | 2008                      |   |   | 2007                         |   |   | 2008 |   |   | 2007 |   |
|                              |   |                      |   |   |                         |   |   |   |   |   |   |   |
| Service cost                      |   | $                         | 98     |   |                         | $      | 88 |   |   | $ | 294 |   |   | $ | 278 |   |
| Interest cost                     |   |                      | 186    |   |                         |   | 187 |   |   |   | 557 |   |   |   | 551 |   |
| Amort. of prior service      cost |   |                      | (226   | )      |                         |   | (233 | ) |   |   | (679 | ) |   |   | (680 | ) |
| Amort. of unrecognized      loss  |   |                      | 28     |   |                         |   | 39 |   |   |   | 85 |   |   |   | 89 |   |
|                              |   | $                         | 86     |   |                         | $      | 81 |   |   | $ | 257 |   |   | $ | 238 |   |
|                              |   |                      |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |   | March      29, 2008 |   |   | June      30, 2007 |   |
|--------------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|--------------------|--------|
|                                                                                             |   |                |   |   |               |   |
| Reducing    revolver                                                                             |   | $                   | 9,600  |   |               | $      | 9,600 |   |
| Capitalized      lease obligations payable in Brazilian currency due 2007-2011,      13.3%-23.1% |   |                | 1,649  |   |               |   | 1,768 |   |
|                                                                                             |   |                | 11,249 |   |               |   | 11,368 |   |
| Less current      portion                                                                        |   |                | 2,922  |   |               |   | 2,848 |   |
|                                                                                             |   | $                   | 8,327  |   |               | $      | 8,520 |   |
|                                                                                             |   |                |   |   |               |   |   |   |

----

----

| Cash      flows (in thousands)                         |   | 13 Weeks Ended |   |   | 39 Weeks Ended |   |
|--------------------------------------------------------|--------|----------------|--------|--------|----------------|--------|
|                                                   |   | 3/29/08        |   |   | 3/24/07        |   |   | 3/29/08 |   |   | 3/24/07 |   |
|                                                   |   |           |   |   |           |   |   |   |   |   |   |   |
| Cash provided by      operations                       |   | $              | 3,452  |   |           | $      | 5,340 |   |   | $ | 17,989 |   |   | $ | 9,347 |   |
| Cash (used in) provided from      investing activities |   |           | (1,673 | )      |           |   | (2,511 | ) |   |   | (15,265 | ) |   |   | (3,547 | ) |
| Cash provided from (used in)      financing activities |   |           | (1,697 | )      |           |   | 151 |   |   |   | (3,178 | ) |   |   | (1,755 | ) |
|                                                   |   |           |   |   |           |   |   |   |   |   |   |   |   |   |   |   |

----

----

----

----

----

| ISSUER      PURCHASES OF EQUITY SECURITIES |
|--------------------------------------------|
| Period                                     | Shares      Purchased | Average      Price | Shares      Purchased Under Announced Programs | Shares      yet to be Purchased Under Announced Programs |
| 12/29/2007      - 2/2/2008                 | none | - | none | none |
| 2/3/2008      - 3/1/2008                   | none | - | none | none |
| 3/2/2008      - 3/29/2008                  | none | - | none | none |

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

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

|   | 32 | Certification      of Chief Executive Officer and Chief Financial 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). |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |             |   | THE      L. S. STARRETT COMPANY(Registrant)                      |
|--------|------------------|--------|------------------------------------------------------------------|
|   |             |   |                                                             |
|   |             |   |                                                             |
| Date   | May      8, 2008 |   | S/R.      J. Hylek                                               |
|   |             |   | R.      J. Hylek (Treasurer and Chief Financial Officer)         |
|   |             |   |                                                             |
| Date   | May      8, 2008 |   | S/S.      R.J. Simkevich                                         |
|   |             |   | R.J.      Simkevich (Corp. Controller/Chief Accounting  Officer) |

----