Spinal muscular atrophy (SMA) is a neurodegenerative disorder resulting from homozygous loss of the SMN1 gene. To investigate SMN functions, we undertook the yeast two-hybrid screens and identified Drosophila Rpp20, a subunit of the RNase P and RNase MRP holoenzymes, to interact with the Drosophila SMN protein. Interaction between human SMN and Rpp20 was validated by in vitro binding assays and co-immunoprecipitation. The exons 3-4 of SMN are necessary and sufficient for binding to Rpp20. Binding efficiency between Rpp20 and SMNs with mutations in the Y-G domain is abrogated or reduced and correlated with severity of SMA disease. Immunofluorescence results indicate that Rpp20 is diffusely distributed throughout the cytoplasm with higher concentration observed in the nucleus. However, in response to stress, SMN forms aggregates and redistributes Rpp20 into punctuated cytoplasmic SMN granules. Our findings suggest a possible functional association of SMN with RNase P and RNase MRP complexes.