P-bodies are conserved mRNP complexes that are implicated in determining mRNA fate by affecting translation and mRNA decay. In this report, we identify RGG-motif containing translation repressor protein Sbp1 as a disassembly factor of P-bodies since disassembly of P-bodies is defective in Δsbp1. RGG-motif is necessary and sufficient to rescue the PB disassembly defect in Δsbp1. Binding studies using purified proteins revealed that Sbp1 physically interacts with Edc3 and Sbp1-Edc3 interaction competes with Edc3-Edc3 interaction. Purified Edc3 forms assemblies, promoted by the presence of RNA and NADH and the addition of purified Sbp1, but not the RGG-deletion mutant, leads to significantly decreased Edc3 assemblies. We further note that the aggregates of human EWSR1 protein, implicated in neurodegeneration, are more persistent in the absence of Sbp1 and overexpression of EWSR1 in Δsbp1 leads to a growth defect. Taken together, our observations suggest a role of Sbp1 in disassembly, which could apply to disease-relevant heterologous protein-aggregates.