Missense and splice site mutations in the microtubule-associated protein tau gene were recently found associated with fronto-temporal dementia and parkinsonism linked to chromosome 17 (Poorkaj et al. (1998) Ann. Neurol. 43, 815-825; Hutton et al. (1998) Nature 393, 702-705; Spillantini et al. (1998) Proc. Natl. Acad. Sci. U. S. A. 95, 7737-7741). The mutations in the 5' splice site of exon 10 were shown to increase the ratio of tau mRNAs containing exon 10 and thus the proportion of Tau protein isoforms with 4 microtubule binding repeat domains, although how this increase leads to neurodegeneration is presently unclear. The mechanism by which these mutations increase tau exon 10 splicing was not determined, although the mutations were predicted to disrupt a potential stem-loop structure that was likely involved in the regulation of exon 10 alternative splicing. Here we describe in vitro splicing assays and RNA structural analysis that demonstrate that the mutations do indeed act through disruption of the stem-loop structure and that the stability of this secondary structure feature at least partially determines the ratio of tau exon 10+/- transcripts. In addition, we provide evidence that the stability of the stem-loop structure underlies the alternative splicing of this exon in other species.