Spinal muscular atrophy (SMA) is a degenerative motor neuron disorder resulting from homozygous loss of the SMN1 gene. SMN2, a nearly identical copy gene, is preserved in SMA patients. A single nucleotide difference between SMN1 and SMN2 causes exon 7 skipping in the majority of SMN2 mRNA. Gene therapy through modulation of SMN2 gene transcription in SMA patients may be possible. We constructed a series of SMN mini-genes comprised of SMN exon 6 to exon 8 sequences fused to green fluorescence protein (GFP) or luciferase reporters, to monitor SMN exon 7 splicing. These reporters recapitulated the splicing patterns of the endogenous SMN gene in stable cell lines. The SMN1-luciferase reporter was approximately 3.5-fold more active than SMN2-luciferase and SMN1-GFP intensities were visually distinguishable from SMN2-GFP. We have screened chemical inducers and inhibitors of kinase pathways using stable SMN-reporter lines and found that the phosphatase inhibitor sodium vanadate specifically stimulated exon 7 inclusion within SMN2 mRNAs. This is the first compound identified that can stimulate exon 7 inclusion into transcripts derived from the endogenous SMN2 gene. These results demonstrate that this system can be utilized to identify small molecules that regulate the splicing of SMN exon 7.