The smallest genomic region causing Prader-Willi Syndrome (PWS) deletes the non-coding RNA SNORD116 cluster; however, the function of SNORD116 remains a mystery. Previous work in the field revealed the tantalizing possibility that expression of NHLH2, a gene previously implicated in both obesity and hypogonadism, was downregulated in PWS patients and differentiated stem cells. In silico RNA: RNA modeling identified several potential interaction domains between SNORD116 and NHLH2 mRNA. One of these interaction domains was highly conserved in most vertebrate NHLH2 mRNAs examined. A construct containing the Nhlh2 mRNA, including its 3’-UTR, linked to a c-myc tag was transfected into a hypothalamic neuron cell line in the presence and absence of exogenously-expressed Snord116. Nhlh2 mRNA expression was upregulated in the presence of Snord116 dependent on the length and type of 3’UTR used on the construct. Furthermore, use of actinomycin D to stop new transcription in N29/2 cells demonstrated that the upregulation occurred through increased stability of the Nhlh2 mRNA in the 45 minutes immediately following transcription. In silico modeling also revealed that a single nucleotide variant (SNV) in the NHLH2 mRNA could reduce the predicted interaction strength of the NHLH2:SNORD116 diad. Indeed, use of an Nhlh2 mRNA construct containing this SNV significantly reduces the ability of Snord116 to increase Nhlh2 mRNA levels. For the first time, these data identify a motif and mechanism for SNORD116-mediated regulation of NHLH2, clarifying the mechanism by which deletion of the SNORD116 snoRNAs locus leads to PWS phenotypes.