Although it is well known that the so-called “equivalent solution” or “effective” solvent permittivity (dielectric constant) in proteins and nucleic acids is lower than in bulk water, this fact is commonly neglected in (bioinorganic) studies of such compounds. Using domain 5 of the group II intron ribozyme Sc.ai5γ, we describe here the influence of 1,4-dioxane-d8 on the structure and magnesium(II)-binding properties of this catalytic domain. Applying one- and two-dimensional NMR, we observe distinct structural changes in the functionally important bulge region following a decrease in solvent permittivity. Concomitantly, an increase by a factor of 1.5 in the affinity of Mg2+ towards the individual-binding sites in the catalytic core domain is observed upon addition of 1,4-dioxane-d8. This has led to the detection of a new metal ion coordination site near the GU wobble pair in the catalytic triad. Our results show that solvent permittivity is an important factor in the formation of intrinsic RNA structures and affects their metal ion-binding properties. Hence, solvent permittivity should be taken into account in future studies.