|                                                                                                                                                                                                                                                                                                                                                                                | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                |                                                                                               |
|        x                                                                                                                                                                                                                                                                                                                                                                       | For      the quarterly period ended                                                                | September      27, 2008 |
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| OR                                                                                                                                                                                                                                                                                                                                                                                  |
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|                                                                                                                                                                                                                                                                                                                                                                                | 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                                                                                                                                                                                                                                                                                                                                                | October      31, 2008                                                                              |   |
|                                                                                                                                                                                                                                                                                                                                                                                |                                                                                               |
| Class      A Common Shares                                                                                                                                                                                                                                                                                                                                                          | 5,726,457                                                                                          |   |
|                                                                                                                                                                                                                                                                                                                                                                                |                                                                                               |
| Class      B Common Shares                                                                                                                                                                                                                                                                                                                                                          | 888,440                                                                                            |   |

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|                                                                                                                                                                         |   | Page No. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|
|                                                                                                                                                                         |   |     |
| Part      I.                      Financial      Information:  |   |     |
|                                                                                                                                                                         |   |     |
| Item      1.                      Financial      Statements    |   |     |
|                                                                                                                                                                         |   |     |
| Consolidated      Statements of Operations –thirteen      weeks ended September 27, 2008 and September 29, 2007      (unaudited)                                       |   | 3        |
|                                                                                                                                                                         |   |     |
| Consolidated      Statements of Cash Flows –thirteen      weeks ended September 27, 2008 and September 29, 2007      (unaudited)                                       |   | 4        |
|                                                                                                                                                                         |   |     |
| Consolidated      Balance Sheets –September      27, 2008 (unaudited) and June 28, 2008                                                                                |   | 5        |
|                                                                                                                                                                         |   |     |
| Consolidated      Statements of Stockholders' Equity -thirteen      weeks ended September 27, 2008 and September 29, 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                                                                                                    |   | 13       |
|                                                                                                                                                                         |   |     |
| Item      4.                      Controls      and Procedures |   | 13       |
|                                                                                                                                                                         |   |     |
| Part      II.  Other information:                                                                                                                                  |   |     |
|                                                                                                                                                                         |   |     |
| Item      1A.Risk Factors                                                                                                                                                    |   | 13-15    |
|                                                                                                                                                                         |   |     |
| Item      6.                      Exhibits                     |   | 15       |
|                                                                                                                                                                         |   |     |
| SIGNATURES                                                                                                                                                                   |   | 15       |

----

|                                                                                |   | 13 Weeks Ended |    |
|-------------------------------------------------------------------------------------|--------|----------------|---------|
|                                                                                |   | 9/27/08        |    |   | 9/29/07 |   |
|                                                                                |   |           |    |   |   |   |
| Net      sales                                                                      |   | $              | 67,985  |   |   | $ | 59,550 |   |
| Cost      of goods sold                                                             |   |           | (46,792 | ) |   |   | (40,996 | ) |
| Selling      and general expense                                                    |   |           | (17,498 | ) |   |   | (14,703 | ) |
| Other      income (expense)                                                         |   |           | 535     |   |   |   | (266 | ) |
|                                                                                |   |           |    |   |   |   |   |   |
| Earnings      before income taxes                                                   |   |           | 4,230   |   |   |   | 3,585 |   |
| Income      tax expense                                                             |   |           | 1,607   |   |   |   | 1,255 |   |
|                                                                                |   |           |    |   |   |   |   |   |
| Net      earnings                                                                   |   | $              | 2,623   |   |   | $ | 2,330 |   |
|                                                                                |   |           |    |   |   |   |   |   |
|                                                                                |   |           |    |   |   |   |   |   |
|                                                                                |   |           |    |   |   |   |   |   |
| Basic      and diluted earnings per share                                           |   | $              | 0.40    |   |   | $ | 0.35 |   |
|                                                                                |   |           |    |   |   |   |   |   |
| Average      outstanding shares used in per share calculations (in      thousands): |   |           |    |   |   |   |   |   |
| Basic                                                                               |   |           | 6,618   |   |   |   | 6,596 |   |
| Diluted                                                                             |   |           | 6,627   |   |   |   | 6,605 |   |
|                                                                                |   |           |    |   |   |   |   |   |
|                                                                                |   |           |    |   |   |   |   |   |
|                                                                                |   |           |    |   |   |   |   |   |
| Dividends      per share                                                            |   | $              | 0.12    |   |   | $ | 0.10 |   |
|                                                                                |   |           |    |   |   |   |   |   |

----

|                                                     |   | 13 Weeks Ended |   |
|----------------------------------------------------------|--------|----------------|--------|
|                                                     |   | 9/27/08        |   |   | 9/29/07 |   |
|                                                     |   |           |   |   |   |   |
| Cash      flows from operating activities:               |   |           |   |   |   |   |
| Net earnings                                             |   | $              | 2,623  |   |   | $ | 2,330 |   |
| Non-cash items      included:                            |   |           |   |   |   |   |   |   |
| Depreciation                                             |   |           | 2,356  |   |   |   | 2,374 |   |
| Amortization                                             |   |           | 312    |   |   |   | 295 |   |
| Net long-term tax      payable                           |   |           | 101    |   |   |   | - |   |
| Deferred taxes                                           |   |           | 77     |   |   |   | 447 |   |
| Unrealized transaction (gains)      losses               |   |           | (24    | ) |   |   | 202 |   |
| Retirementbenefits                                       |   |           | (510   | ) |   |   | (821 | ) |
| Cumulative effect of adopting FIN      48                |   |           | -      |   |   |   | (312 | ) |
| Working capital      changes:                            |   |           |   |   |   |   |   |   |
| Receivables                                              |   |           | (2,231 | ) |   |   | (3,115 | ) |
| Inventories                                              |   |           | (4,364 | ) |   |   | 2,184 |   |
| Other current    assets                                  |   |           | (617   | ) |   |   | 907 |   |
| Other current      liabilities                           |   |           | (195   | ) |   |   | (73 | ) |
| Prepaid pension cost and      other                      |   |           | 978    |   |   |   | 345 |   |
| Net cash (used in) provided by      operating activities |   |           | (1,494 | ) |   |   | 4,763 |   |
|                                                     |   |           |   |   |   |   |   |   |
| Cash      flows from investing activities:               |   |           |   |   |   |   |   |   |
| Additions to plant and      equipment                    |   |           | (2,968 | ) |   |   | (2,397 | ) |
| (Increase) decrease in      investments                  |   |           | 3,299  |   |   |   | (760 | ) |
| Purchase of Kinemetric      Engineering                  |   |           | -      |   |   |   | (2,060 | ) |
| Net cash (used in) provided by      investing activities |   |           | 331    |   |   |   | (5,217 | ) |
|                                                     |   |           |   |   |   |   |   |   |
| Cash      flows from financing activities:               |   |           |   |   |   |   |   |   |
| Proceeds from short-term      borrowings                 |   |           | 4,036  |   |   |   | 2,216 |   |
| Short-term debt      repayments                          |   |           | (420   | ) |   |   | (2,144 | ) |
| Long-term debt      repayments                           |   |           | (134   | ) |   |   | (115 | ) |
| Common stockissued                                       |   |           | 156    |   |   |   | 111 |   |
| Treasury shares      purchased                           |   |           | -      |   |   |   | (317 | ) |
| Dividends                                                |   |           | (794   | ) |   |   | (660 | ) |
| Net cash (used in) provided by      financing activities |   |           | 2,844  |   |   |   | (909 | ) |
|                                                     |   |           |   |   |   |   |   |   |
| Effect      of exchange rate changes on cash             |   |           | (514   | ) |   |   | 30 |   |
|                                                     |   |           |   |   |   |   |   |   |
| Net      increase (decrease) in cash                     |   |           | 1,167  |   |   |   | (1,333 | ) |
| Cash,      beginning of period                           |   |           | 6,515  |   |   |   | 7,708 |   |
| Cash,      end of period                                 |   | $              | 7,682  |   |   | $ | 6,375 |   |
|                                                     |   |           |   |   |   |   |   |   |

----

|                                                                                                                                |   | Sept.      272008(unaudited) |    |   | June      28 2008 |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|--------|-------------------|--------|
|                                                                                                                                |   |                         |    |   |              |   |
| ASSETS                                                                                                                              |   |                         |    |   |              |   |
| Current      assets:                                                                                                                |   |                         |    |   |              |   |
| Cash                                                                                                                                |   | $                            | 7,682   |   |              | $      | 6,515 |   |
| Investments                                                                                                                         |   |                         | 15,505  |   |              |   | 19,806 |   |
| Accounts receivable (less      allowance for doubtful accounts of $798 and $701)                                                    |   |                         | 40,781  |   |              |   | 39,627 |   |
| Inventories:                                                                                                                        |   |                         |    |   |              |   |   |   |
| Raw materials and      supplies                                                                                                     |   |                         | 18,126  |   |              |   | 15,104 |   |
| Goods in process and finished      parts                                                                                            |   |                         | 17,764  |   |              |   | 16,653 |   |
| Finished goods                                                                                                                      |   |                         | 28,867  |   |              |   | 29,400 |   |
|                                                                                                                                |   |                         | 64,757  |   |              |   | 61,157 |   |
| Current deferred income tax      asset                                                                                              |   |                         | 5,835   |   |              |   | 5,996 |   |
| Prepaid expenses, taxes and other      current assets                                                                               |   |                         | 6,132   |   |              |   | 5,535 |   |
| Total current    assets                                                                                                             |   |                         | 140,692 |   |              |   | 138,636 |   |
|                                                                                                                                |   |                         |    |   |              |   |   |   |
| Property,      plant and equipment, at cost (less accumulated depreciation of $131,708      and $131,386)                           |   |                         | 61,045  |   |              |   | 60,945 |   |
| Property      held for sale                                                                                                         |   |                         | 1,912   |   |              |   | 1,912 |   |
| Intangible      assets (less accumulated amortization of $2,789 and$2,477)                                                          |   |                         | 3,452   |   |              |   | 3,764 |   |
| Goodwill                                                                                                                            |   |                         | 6,032   |   |              |   | 6,032 |   |
| Pension      asset                                                                                                                  |   |                         | 34,986  |   |              |   | 34,643 |   |
| Other      assets                                                                                                                   |   |                         | 1,101   |   |              |   | 1,877 |   |
| Long-term      taxes receivable                                                                                                     |   |                         | 2,476   |   |              |   | 2,476 |   |
| Total assets                                                                                                                        |   | $                            | 251,696 |   |              | $      | 250,285 |   |
|                                                                                                                                |   |                         |    |   |              |   |   |   |
|                                                                                                                                |   |                         |    |   |              |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                                           |   |                         |    |   |              |   |   |   |
| Current      liabilities:                                                                                                           |   |                         |    |   |              |   |   |   |
| Notes payable and current      maturities                                                                                           |   | $                            | 7,742   |   |              | $      | 4,121 |   |
| Accounts payable and accrued      expenses                                                                                          |   |                         | 18,011  |   |              |   | 18,041 |   |
| Accrued salaries and      wages                                                                                                     |   |                         | 6,279   |   |              |   | 6,907 |   |
| Total current      liabilities                                                                                                      |   |                         | 32,032  |   |              |   | 29,069 |   |
|                                                                                                                                |   |                         |    |   |              |   |   |   |
| Long-term      taxes payable                                                                                                        |   |                         | 8,616   |   |              |   | 8,522 |   |
| Deferred      income taxes                                                                                                          |   |                         | 6,289   |   |              |   | 6,312 |   |
| Long-term      debt                                                                                                                 |   |                         | 5,699   |   |              |   | 5,834 |   |
| Postretirement      benefit liability                                                                                               |   |                         | 13,292  |   |              |   | 13,775 |   |
| Total liabilities                                                                                                                   |   |                         | 65,928  |   |              |   | 63,512 |   |
|                                                                                                                                |   |                         |    |   |              |   |   |   |
| Stockholders'      equity:                                                                                                          |   |                         |    |   |              |   |   |   |
| Class      A Common $1 par (20,000,000 shrs. authorized)5,733,012      outstanding on 9/27/08,5,708,100      outstanding on 6/28/08 |   |                         | 5,733   |   |              |   | 5,708 |   |
| Class      B Common $1 par (10,000,000 shrs. authorized)888,440      outstanding on 9/27/08,906,065      outstanding on 6/28/08     |   |                         | 888     |   |              |   | 906 |   |
| Additional paid-in      capital                                                                                                     |   |                         | 49,777  |   |              |   | 49,613 |   |
| Retained earnings reinvested      and employed in the business                                                                      |   |                         | 135,938 |   |              |   | 134,109 |   |
| Accumulated other comprehensive      loss                                                                                           |   |                         | (6,568  | )      |              |   | (3,563 | ) |
| Total stockholders'      equity                                                                                                     |   |                         | 185,768 |   |              |   | 186,773 |   |
| Total liabilities and      stockholders’ equity                                                                               |   | $                            | 251,696 |   |              | $      | 250,285 |   |

----

|                                                                   |   | Common      Stock Out-standing($1      Par) |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |
|------------------------------------------------------------------------|--------|--------------------------------------------------|--------|--------|--------------|--------|--------|---------------------------|--------|--------|------------------------|--------|--------|------------------------------------------------|---------|
|                                                                   |   | Class      A                                     |   |   | Class      B |   |   | Addi-tionalPaid-inCapital |   |   | Retained      Earnings |   |   | AccumulatedOther      Com-prehensive      Loss |    |   | Total |   |
|                                                                   |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |
| Balance      June 30, 2007                                             |   | $                                                | 5,632  |   |         | $      | 963    |                      |   | $      | 49,282                 |   |   | $                                              | 127,023 |   |   | $ | (5,786 | ) |   | $ | 177,114 |   |
| Comprehensive      income (loss):                                      |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Net earnings                                                           |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           | 2,330   |   |   |   |   |   |   |   | 2,330 |   |
| Unrealized net gain (loss)      oninvestments and swap agreement       |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | (45 | ) |   |   | (45 | ) |
| Minimum pension liability,      net                                    |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | - |   |   |   | - |   |
| Translation gain,    net                                               |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | 315 |   |   |   | 315 |   |
| Total      comprehensive income (loss)                                 |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   | 2,600 |   |
| Tax      adjustment for FIN48                                          |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           | (312    | ) |   |   |   |   |   |   | (312 | ) |
| Dividends      ($.10 per share)                                        |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           | (660    | ) |   |   |   |   |   |   | (660 | ) |
| Treasury      shares:                                                  |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Purchased                                                              |   |                                             | (20    | )      |         |   |   |                      |   |   | (297                   | )      |   |                                           |    |   |   |   |   |   |   |   | (317 | ) |
| Issued                                                                 |   |                                             | 6      |   |         |   |   |                      |   |   | 105                    |   |   |                                           |    |   |   |   |   |   |   |   | 111 |   |
| Issuance      of stock under ESPP                                      |   |                                             |   |   |         |   |   |                      |   |   | 11                     |   |   |                                           |    |   |   |   |   |   |   |   | 11 |   |
| Conversion                                                             |   |                                             | 19     |   |         |   | (19    | )                         |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   | - |   |
|                                                                   |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Balance      September 29, 2007                                        |   | $                                                | 5,637  |   |         | $      | 944    |                      |   | $      | 49,101                 |   |   | $                                              | 128,381 |   |   | $ | (5,516 | ) |   | $ | 178,547 |   |
|                                                                   |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Balance      June 28, 2008                                             |   | $                                                | 5,708  |   |         | $      | 906    |                      |   | $      | 49,613                 |   |   | $                                              | 134,109 |   |   | $ | (3,563 | ) |   | $ | 186,773 |   |
| Comprehensive      income (loss):                                      |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Net earnings                                                           |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           | 2,623   |   |   |   |   |   |   |   | 2,623 |   |
| Unrealized net gain (loss)      oninvestments and swap agreement       |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | 39 |   |   |   | 39 |   |
| Minimum pension liability,      net                                    |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | - |   |   |   | - |   |
| Translation loss,    net                                               |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | (3,044 | ) |   |   | (3,044 | ) |
| Total      comprehensive income (loss)                                 |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   | (382 | ) |
| Dividends      ($.12 per share)                                        |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           | (794    | ) |   |   |   |   |   |   | (794 | ) |
| Treasury      shares:                                                  |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Purchased                                                              |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Issued                                                                 |   |                                             | 7      |   |         |   |   |                      |   |   | 149                    |   |   |                                           |    |   |   |   |   |   |   |   | 156 |   |
| Issuance      of stock under ESPP                                      |   |                                             |   |   |         |   |   |                      |   |   | 15                     |   |   |                                           |    |   |   |   |   |   |   |   | 15 |   |
| Conversion                                                             |   |                                             | 18     |   |         |   | (18    | )                         |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   | - |   |
|                                                                   |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Balance      September 27, 2008                                        |   | $                                                | 5,733  |   |         | $      | 888    |                      |   | $      | 49,777                 |   |   | $                                              | 135,938 |   |   | $ | (6,568 | ) |   | $ | 185,768 |   |
|                                                                   |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Cumulative      Balance:                                               |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Translation loss                                                       |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   | $ | (2,439 | ) |   |   |   |   |
| Unrealized loss on investments      and swapagreements                 |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | (301 | ) |   |   |   |   |
| Amounts not recognized as a      componentof net periodic benefit cost |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   |   | (3,828 | ) |   |   |   |   |
|                                                                   |   |                                             |   |   |         |   |   |                      |   |   |                   |   |   |                                           |    |   |   | $ | (6,568 | ) |   |   |   |   |

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|                                                      |   | Thirteen WeeksEnded September |   |
|-----------------------------------------------------------|--------|-------------------------------|--------|
|                                                      |   | 2008                          |   |   | 2007 |   |
|                                                      |   |                          |   |   |   |   |
| Interest income                                           |   | $                             | 317    |   |   | $ | 311 |   |
| Interest expense and commitment      fees                 |   |                          | (182   | ) |   |   | (255 | ) |
| Realized and unrealized exchange      gains (losses), net |   |                          | 430    |   |   |   | (199 | ) |
| Other                                                     |   |                          | (30    | ) |   |   | (123 | ) |
| Other income      (expense)                               |   | $                             | 535    |   |   | $ | (266 | ) |
|                                                      |   |                          |   |   |   |   |   |   |

----

|                                    |   | Thirteen WeeksEnded September |   |
|-----------------------------------------|--------|-------------------------------|--------|
|                                    |   | 2008                          |   |   | 2007 |   |
|                                    |   |                          |   |   |   |   |
| Service cost                            |   | $                             | 573    |   |   | $ | 931 |   |
| Interest cost                           |   |                          | 1,784  |   |   |   | 2,965 |   |
| Expected return on plan      assets     |   |                          | (2,636 | ) |   |   | (4,227 | ) |
| Amort. of transition      obligation    |   |                          | -      |   |   |   | - |   |
| Amort. of prior service      cost       |   |                          | 110    |   |   |   | 198 |   |
| Amort. of unrecognized (gain)      loss |   |                          | (3     | ) |   |   | (2 | ) |
|                                    |   | $                             | (172   | ) |   | $ | (135 | ) |
|                                    |   |                          |   |   |   |   |   |   |

|                              |   | Thirteen WeeksEnded September |   |
|-----------------------------------|--------|-------------------------------|--------|
|                              |   | 2008                          |   |   | 2007 |   |
|                              |   |                          |   |   |   |   |
| Service cost                      |   | $                             | 88     |   |   | $ | 99 |   |
| Interest cost                     |   |                          | 177    |   |   |   | 180 |   |
| Amort. of prior service      cost |   |                          | (226   | ) |   |   | (226 | ) |
| Amort. of unrecognized      loss  |   |                          | -      |   |   |   | 22 |   |
|                              |   | $                             | 39     |   |   | $ | 75 |   |
|                              |   |                          |   |   |   |   |   |   |

|                                                                                             |   | Sept.      27,2008 |   |   | June      28,2008 |   |
|--------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                                                             |   |               |   |   |              |   |
| Reducing    revolver                                                                             |   | $                  | 7,200  |   |              | $      | 7,200 |   |
| Capitalized      lease obligations payable in Brazilian currency due 2009-2011,      13.3%-23.1% |   |               | 1,426  |   |              |   | 1,569 |   |
|                                                                                             |   |               | 8,626  |   |              |   | 8,769 |   |
| Less current      portion                                                                        |   |               | 2,927  |   |              |   | 2,935 |   |
|                                                                                             |   | $                  | 5,699  |   |              | $      | 5,834 |   |

----

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| Cash      flows (in thousands)                                  |   | 13 Weeks Ended |   |
|-----------------------------------------------------------------|--------|----------------|--------|
|                                                            |   | 9/27/08        |   |   | 9/29/07 |   |
|                                                            |   |           |   |   |   |   |
| Cash provided by (used in)      operations                      |   | $              | (1,494 | ) |   | $ | 4,763 |   |
| Cash provided by  (used      in) investing activities |   |           | 331    |   |   |   | (5,217 | ) |
| Cash provided by (used in)      financing activities            |   |           | 2,844  |   |   |   | (909 | ) |
|                                                            |   |           |   |   |   |   |   |   |

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|   | 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 Chief Financial 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 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),      filed herewith. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                  |   | THE      L. S. STARRETT COMPANY(Registrant)              |
|--------|-----------------------|--------|----------------------------------------------------------|
|   |                  |   |                                                     |
|   |                  |   |                                                     |
| Date   | November      6, 2008 |   | R.      J. Hylek                                         |
|   |                  |   | R.      J. Hylek (Treasurer and Chief Financial Officer) |
|   |                  |   |                                                     |
| Date   | November      6, 2008 |   | R.      J. Simkevich                                     |
|   |                  |   | R.      J. Simkevich (Corporate Controller)              |

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