Lin28 is a conserved cytoplasmic protein with an unusual pairing of RNA-binding motifs: a cold shock domain and a pair of retroviral-type CCHC zinc fingers. In the nematode C. elegans, it is a regulator of developmental timing. In mammals, it is abundant in diverse types of undifferentiated cells. However, its molecular function is unknown. In pluripotent mammalian cells, Lin28 is observed in RNase-sensitive complexes with poly(A)-binding protein, and in polysomal fractions of sucrose gradients, suggesting it is associated with translating mRNAs. Upon cellular stress, Lin28 locates to stress granules, which contain non-translating mRNA complexes. However, Lin28 also localizes to cytoplasmic processing bodies, or P-bodies, sites of mRNA degradation and microRNA regulation, consistent with it acting to regulate mRNA translation or stability. Mutational analysis shows that Lin28's conserved RNA binding domains cooperate to put Lin28 in mRNPs, but that only the CCHC domain is required for localization to P-bodies. When both RNA-binding domains are mutated, Lin28 accumulates in the nucleus, suggesting that it normally shuttles from nucleus to cytoplasm bound to RNA. These studies are consistent with a model in which Lin28 binds mRNAs in the nucleus and accompanies them to ribosomes and P-bodies. We propose that Lin28 influences the translation or stability of specific mRNAs during differentiation.