General mRNA processing factors are traditionally thought to function only in the control of global gene expression. Here we show that the Sm proteins, core components of the splicesome, also regulate germ granules during early C. elegans development. Germ granules are large cytoplasmic particles that localize to germ cells and their precursors during embryogenesis of diverse organisms. In C. elegans, germ granules, called P granules, are segregated to the germline precursor cells during embryogenesis by asymmetric cell division, and they remain in germ cells at all stages of development. We found that at least some Sm proteins are components of P granules. Moreover, disruption of Sm activity caused defects in P granule localization to the germ cell precursors during early embryogenesis. In contrast, loss of other splicing factor activities had no effect on germ granule control in the embryo. These observations suggest that the Sm proteins control germ granule integrity and localization in the early C. elegans embryo and that this role is independent of pre-mRNA splicing. Thus, a highly conserved splicing factor may have been adapted to control both snRNP biogenesis and the localization of components important for germ cell function.