Spinal muscular atrophy (SMA) is a neurodegenerative disease of spinal motor neurons caused by reduced levels of functional survival of motor neurons (SMN) protein. SMN is part of a macromolecular complex that contains the SMN-interacting protein 1 (SIP1) and spliceosomal Sm proteins. Although it is clear that SIP1 as a component of this complex is essential for spliceosomal uridine-rich small ribonucleoprotein (U snRNP) assembly, the role of SMN and its functional interactions with SIP1 and Sm proteins are poorly understood. Here we show that the central region of SMN comprising a tudor domain facilitates direct binding to Sm proteins. Strikingly, the SMA-causing missense mutation E134K within the tudor domain severely reduced the ability of SMN to interact with Sm proteins. Moreover, antibodies directed against the tudor domain prevent Sm protein binding to SMN and abolish assembly of U snRNPs in vivo. Thus, our data show that SMN is an essential U snRNP assembly factor and establish a direct correlation between defects in the biogenesis of U snRNPs and SMA.