Humans have two nearly identical copies of the survival motor neuron (SMN ) gene, SMN1 and SMN2. Homozygous loss of SMN1 causes spinal muscular atrophy (SMA). SMN2 is unable to prevent the disease due to skipping of exon 7. Using a systematic approach of in vivo selection, we have previously demonstrated that a weak 5' splice site (ss) serves as the major cause of skipping of SMN2 exon 7. Here we show the inhibitory impact of RNA structure on the weak 5' ss of exon 7. We call this structure terminal stem-loop 2 (TSL2). Confirming the inhibitory nature of TSL2, point mutations that destabilize TSL2 promote exon 7 inclusion in SMN2, whereas strengthening of TSL2 promotes exon 7 skipping even in SMN1. We also demonstrate that TSL2 negatively affects the recruitment of U1snRNP at the 5' ss of exon 7. Using enzymatic structure probing, we confirm that the sequence at the junction of exon 7/intron 7 folds into TSL2 and show that mutations in TSL2 cause predicted structural changes in this region. Our findings reveal for the first time the critical role of RNA structure in regulation of alternative splicing of human SMN.