P element somatic inhibitor (PSI) is a 97-kDa RNA-binding protein with four KH motifs that is involved in the inhibition of splicing of the Drosophila P element third intron (IVS3) in somatic cells. PSI interacts with a negative regulatory element in the IVS3 5' exon. This element contains two pseudo-5' splice sites, termed F1 and F2. To identify high affinity binding sites for the PSI protein, in vitro selection (SELEX) was performed using a random RNA oligonucleotide pool. Alignment of high affinity PSI-binding RNAs revealed a degenerate consensus sequence consisting of a short core motif of CUU flanked by alternative purines and pyrimidines. Interestingly, this sequence resembles the F2 pseudo-5' splice site in the P element negative regulatory element. Additionally, a negative in vitro selection of PCR-mutagenized P element 5' exon regulatory element RNAs identified two U residues in the F1 and F2 pseudo-5' splice sites as important nucleotides for PSI binding and the U residue in the F2 region is a nearly invariant nucleotide in the consensus SELEX motif. The high affinity PSI SELEX sequence acted as a splicing inhibitor when placed in the context of a P element splicing pre-mRNA in vitro. Data from in vitro splicing assays, UV crosslinking and RNA-binding competition experiments indicates a strong correlation between the binding affinities of PSI for the SELEX sequences and their ability to modulate splicing of P element IVS3 in vitro.