Component of LSm protein complexes, which are involved in RNA processing and may function in a chaperone-like manner, facilitating the efficient association of RNA processing factors with their substrates. Component of the cytoplasmic LSM1-LSM7 complex, which is thought to be involved in mRNA degradation by activating the decapping step in the 5'-to-3' mRNA decay pathway. Component of the nuclear LSM2-LSM8 complex, which is involved in splicing of nuclear mRNAs. LSM2-LSM8 associates with multiple snRNP complexes containing the U6 snRNA (U4/U6 di-snRNP, spliceosomal U4/U6.U5 tri-snRNP, and free U6 snRNP). It binds directly to the 3'-terminal U-tract of U6 snRNA and plays a role in the biogenesis and stability of the U6 snRNP and U4/U6 snRNP complexes. LSM2-LSM8 probably also is involved degradation of nuclear pre-mRNA by targeting them for decapping, and in processing of pre-tRNAs, pre-rRNAs and U3 snoRNA (By similarity).