During each spliceosome cycle, U6 RNA undergoes several conformational changes, involving the formation and disruption of base-pairing interactions with U4 and U2 RNAs. By use of a mutational approach we have focused on the stem II region of U6, which can adopt alternative conformations: In the singular form of U6, it can form an intramolecular stem-loop structure; in the U4/U6 snRNP, the stem II region base-pairs with U4 RNA; in the active spliceosome, this region has been proposed to fold back into an intramolecular U6 helix in the context of a U6-U2 structure. Using chemical modification/interference assays and a mutational approach we found that the 3' terminal loop of the singular U6 (nucleotides 65-69) is essential for initiating the U4-U6 base-pairing interaction. A series of point mutations in the adjacent helix was designed to alter the stability of the intramolecular helix. Stabilizing mutations inhibited the formation of the U4/U6 snRNP. In contrast, mutant U6 RNAs with a destabilized intramolecular helix were still active in U4-U6 interaction and spliceosome assembly; however, their ability to support the first step of splicing was strongly reduced, suggesting that the intramolecular U6 helix has an important function in the first step of splicing. Affinity-purified U4 snRNP and U6 RNA did not assemble into a stable U4/U6 snRNP, unless complemented by nuclear extract, indicating that a protein factor (or factors) is necessary for the U4-U6 interaction. In sum, these data demonstrate that the stem II region of U6 functions both in U4-U6 interaction and in the first step of splicing; they also provide evidence that the balanced stability of different conformations of U6 RNA is critical for its function.