The 7SK small nuclear ribonucleoprotein (snRNP) plays a central role in RNA polymerase II elongation control by regulating the availability of active P-TEFb. We optimized conditions for analyzing 7SK RNA by SHAPE and demonstrated a hysteretic effect of magnesium on 7SK folding dynamics including a 7SK GAUC motif switch. We also found evidence that the 5΄ end pairs alternatively with two different regions of 7SK giving rise to open and closed forms that dictate the state of the 7SK motif. We then used recombinant P-TEFb, HEXIM1, LARP7 and MEPCE to reconstruct a functional 7SK snRNP in vitro. Stably associated P-TEFb was highly inhibited, but could still be released and activated by HIV-1 Tat. Notably, P-TEFb association with both in vitro-reconstituted and cellular snRNPs led to similar changes in SHAPE reactivities, confirming that 7SK undergoes a P-TEFb-dependent structural change. We determined that the xRRM of LARP7 binds to the 3΄ stem loop of 7SK and inhibits the methyltransferase activity of MEPCE through a C-terminal MEPCE interaction domain (MID). Inhibition of MEPCE is dependent on the structure of the 3΄ stem loop and the closed form of 7SK RNA. This study provides important insights into intramolecular interactions within the 7SK snRNP.