Stem-loop binding protein (SLBP) is an essential component of the histone pre-mRNA processing machinery. SLBP protein expression was examined during Drosophila development by using transgenes expressing hemagglutinin (HA) epitope-tagged proteins expressed from the endogenous Slbp promoter. Full-length HA-dSLBP complemented a Slbp null mutation, demonstrating that it was fully functional. dSLBP protein accumulates throughout the cell cycle, in contrast to the observed restriction of mammalian SLBP to S phase. dSLBP is located in both nucleus and cytoplasm in replicating cells, but it becomes predominantly nuclear during G2. dSLBP is present in mitotic cells and is down-regulated in G1 when cells exit the cell cycle. We determined whether mutation at previously identified phosphorylation sites, T120 and T230, affected the ability of the protein to restore viability and histone mRNA processing to dSLBP null mutants. The T120A SLBP restored viability and histone pre-mRNA processing. However, the T230A mutant, located in a conserved TPNK sequence in the RNA binding domain, did not restore viability and histone mRNA processing in vivo, although it had full activity in histone mRNA processing in vitro. The T230A protein is concentrated in the cytoplasm, suggesting that it is defective in nuclear targeting, and accounting for its failure to function in histone pre-mRNA processing in vivo.