In Trypanosoma brucei the small nuclear (sn) RNAs U1, U2, U4, and U5, as well as the spliced leader (SL) RNA, bind the seven Sm canonical proteins carrying the consensus Sm motif. To determine the function of these proteins in snRNA and SL RNA biogenesis, two of the Sm core proteins, SmE and SmD1, were silenced by RNAi. Surprisingly, whereas the level of all snRNAs, including U1, U2, U4, and U5 was reduced during silencing, the level of SL RNA was dramatically elevated, but the levels of U6 and spliced leader-associated RNA (SLA1) remained unchanged. The SL RNA that had accumulated in silenced cells lacked modification at the cap4 nucleotide but harbored modifications at the cap1 and cap2 nucleotides and carried the characteristic ψ. This SL RNA possessed a longer tail and had accumulated in the cytoplasm in 10 and 50 S particles that were found by in situ hybridization to be present in "speckles." We propose a model for SL RNA biogenesis involving a cytoplasmic phase and suggest that the trypanosome-specific "cap4" nucleotides function as a signal for export and import of SL RNA out and into the nucleus. The SL RNA biogenesis pathway differs from that of U sn ribonucleoproteins (RNPs) in that it is the only RNA that binds Sm proteins that were stabilized under Sm depletion in a novel RNP, which we termed SL RNP-C.