Transactive response DNA-binding protein 43 (TDP-43) performs multiple tasks in mRNA processing, transport, and translational regulation, but it also forms aggregates implicated in amyotrophic lateral sclerosis. TDP-43's N-terminal domain (NTD) is important for these activities and dysfunctions; however, there is an open debate about whether or not it adopts a specifically folded, stable structure. Here, we studied NTD mutations designed to destabilize its structure utilizing NMR and fluorescence spectroscopies, analytical ultracentrifugation, splicing assays, and cell microscopy. The substitutions V31R and T32R abolished TDP-43 activity in splicing and aggregation processes, and even the rather mild L28A mutation severely destabilized the NTD, drastically reducing TDP-43's splicing activity and inducing aberrant localization and aggregation in cells. These findings strongly support the idea that a stably folded NTD is essential for correct TDP-43 function. The stably folded NTD also promotes dimerization, which is pertinent to the protein's activities and pathological aggregation, and we present an atomic-level structural model for the TDP-43 dimer based on NMR data. Leu-27 is evolutionarily well conserved even though it is exposed in the monomeric NTD. We found here that Leu-27 is buried in the dimer and that the L27A mutation promotes monomerization. In conclusion, our study sheds light on the structural and biological properties of the TDP-43 NTD, indicating that the NTD must be stably folded for TDP-43's physiological functions, and has implications for understanding the mechanisms promoting the pathological aggregation of this protein.