The Spinal Muscular Atrophy (SMA) gene SMN was recently duplicated (SMN1 and SMN2) in higher primates. Furthermore, invasion of the locus by repetitive elements almost doubled its size with respect to mouse Smn, in spite of an almost identical protein-coding sequence. Herein, we found that SMN ranks among the human genes with highest density of Alus, which are evolutionary conserved in primates and often occur in inverted orientation. Inverted repeat Alus (IRAlus) negatively regulate splicing of long introns within SMN, while promoting widespread alternative circular RNA (circRNA) biogenesis. Bioinformatics analyses revealed the presence of ultra-conserved Sam68 binding sites in SMN IRAlus. Cross-link-immunoprecipitation (CLIP), mutagenesis and silencing experiments showed that Sam68 binds in proximity of intronic Alus in the SMN pre-mRNA, thus favouring circRNA biogenesis in vitro and in vivo. These findings highlight a novel layer of regulation in SMN expression, uncover the crucial impact exerted by IRAlus and reveal a role for Sam68 in SMN circRNA biogenesis.