Spliceosome assembly during pre-mRNA splicing requires the correct positioning of the U1, U2, U4/U6, and U5 small nuclear ribonucleoprotein particles (snRNPs) on the precursor mRNA. The structure and integrity of these snRNPs are maintained in part by the association of the snRNAs with core snRNP (Sm) proteins. The Sm proteins also play a pivotal role in metazoan snRNP biogenesis. We have characterized a Saccharomyces cerevisiae gene, SMD3, that encodes the core snRNP protein Smd3. The Smd3 protein is required for pre-mRNA splicing in vivo. Depletion of this protein from yeast cells affects the levels of U snRNAs and their cap modification, indicating that Smd3 is required for snRNP biogenesis. Smd3 is structurally and functionally distinct from the previously described yeast core polypeptide Smd1. Although Smd3 and Smd1 are both associated with the spliceosomal snRNPs, overexpression of one cannot compensate for the loss of the other. Thus, these two proteins have distinct functions. A pool of Smd3 exists in the yeast cytoplasm. This is consistent with the possibility that snRNP assembly in S. cerevisiae, as in metazoans, is initiated in the cytoplasm from a pool of RNA-free core snRNP protein complexes.