Non-coding Y RNAs are small stem-loop RNAs that are involved in different cellular processes, including the regulation of DNA replication. An evolutionarily conserved small domain in the upper stem of vertebrate Y RNAs has an essential function for the initiation of chromosomal DNA replication. Here we provide a structure-function analysis of this essential RNA domain under physiological conditions. Solution state NMR and far-UV CD spectroscopy show that the upper stem domain of human Y1 RNA adopts a locally destabilised A-form helical structure involving eight Watson-Crick base pairings. Within this helix, two G:C base pairs are highly stable even at elevated temperatures, and therefore may serve as clamps to maintain the local structure of the helix. These two stable G:C base pairs frame three unstable base pairs, which are located centrally between them. Systematic substitution mutagenesis results in a disruption of the ordered A-form helical structure and in the loss of DNA replication initiation activity, establishing a positive correlation between folding stability and function. Our data thus provide a structural basis for the evolutionary conservation of key nucleotides in this RNA domain that are essential for the functionality of non-coding Y RNAs during the initiation of DNA replication.