Alternative splicing produces functionally distinct proteins participating in cellular processes including differentiation and development. CoAA is a coactivator that regulates transcription-coupled splicing and its own pre-mRNA transcript is alternatively spliced. We show here that the CoAA gene is embryonically expressed and alternatively spliced in multiple tissues to three splice variants, CoAA, CoAM and CoAR. During retinoic-acid-induced P19 stem cell differentiation, the expression of CoAA undergoes a rapid switch to its dominant negative splice variant CoAM in the cavity of the embryoid body. CoAM functionally inhibits CoAA, and their switched expression up-regulates differentiation marker Sox6. Using a CoAA minigene cassette, we find that the switched alternative splicing of CoAA and CoAM is regulated by the cis-regulating sequence upstream of the CoAA basal promoter. Consistent to this, we show that p54^nrb and PSF induce CoAM splice variant through the cis-regulating sequence. We have previously shown that the CoAA gene is amplified in human cancers with a recurrent loss of this cis-regulating sequence. These results together suggest that the upstream regulatory sequence contributes to alternative splicing of the CoAA gene during stem cell differentiation, and its selective loss in human cancers potentially deregulates CoAA alternative splicing and alters stem cell differentiation.