Local control of mRNA translation modulates neuronal development, synaptic plasticity, and memory formation. A poorly understood aspect of this control is the role and composition of ribonucleoprotein (RNP) particles that mediate transport and translation of neuronal RNAs. Here, we show that staufen- and FMRP-containing RNPs in Drosophila neurons contain proteins also present in somatic "P bodies," including the RNA-degradative enzymes Dcp1p and Xrn1p/Pacman and crucial components of miRNA (argonaute), NMD (Upf1p), and general translational repression (Dhh1p/Me31B) pathways. Drosophila Me31B is shown to participate (1) with an FMRP-associated, P body protein (Scd6p/trailer hitch) in FMRP-driven, argonaute-dependent translational repression in developing eye imaginal discs; (2) in dendritic elaboration of larval sensory neurons; and (3) in bantam miRNA-mediated translational repression in wing imaginal discs. These results argue for a conserved mechanism of translational control critical to neuronal function and open up new experimental avenues for understanding the regulation of mRNA function within neurons.