The calcitonin/CGRP gene pre-mRNA is alternatively spliced in a tissue-specific manner resulting in the formation of calcitonin mRNA in thyroid C-cells and CGRP mRNA in neurons. Computer analysis of the RNA containing the 3' splice acceptor of the calcitonin-specific exon 4 predicts that this region has the potential to form a thermodynamically stable stem-loop. Data from CD spectroscopy and solution phase structure probing with single-strand specific and double-strand specific RNases indicates that RNA in this region is substantially double stranded. In vitro splicing of chimeric human beta-globin/calcitonin transcripts in HeLa nuclear extract was inhibited by base changes predicted to destabilize the stem, while compensatory base changes resulted in splicing at 50% of wild-type levels. Changing the residue opposite the AG dinucleotide adenosine in the stem from G to U, allowing the formation of an A-U basepair, abolished usage of this splice acceptor in vitro. These results indicate that a thermodynamically stable RNA stem-loop forms in vitro at the 3' splice acceptor of exon 4 of the calcitonin/CGRP gene transcript. This RNA secondary structure acts as a novel cis-element involved in proper splice site selection.