The folding mechanism of the G29A mutant of the B-domain of protein A (BdpA) has been studied by all-atom molecular dynamics simulation using AMBER force field (ff03) and generalized Born continuum solvent model. Started from the extended chain conformation, a total of 16 simulations (400 ns each) at 300 K captured some early folding events of the G29A mutant of BdpA. In one of the 16 trajectories, the G29A mutant folded within 2.8 A (root mean square) of the wild-type NMR structure. We observed that the fast burial of hydrophobic residues was the driving force to bring the distant residues into close proximity. The initiation of the helix I and III occurred during the stage of hydrophobic collapse. The initiation and growth of the helix II was slow. Both the secondary structure formation and the development of the native tertiary contacts suggested a multistage folding process. Clustering analysis indicated that two helix species (helices I and III) could be intermediates. Further analysis revealed that the hydrophobic residues of partially folded helix II formed nativelike hydrophobic contacts with helices I and III that stabilized a nativelike state and delayed the completion of folding of the entire protein. The details of the early folding process were compared with other theoretical and experimental studies. It was found that a nativelike hydrophobic cluster was formed by residues including F(30), I(31), L(34), L(44), L(45), and A(48) that prevented further development of the native structures, and breaking the hydrophobic cluster like this one contributed to the rate-limiting step. This was in complete agreement with the recent kinetic measurements in which mutations of these residues to Gly and Ala substantially increased the folding rates by as much as 60 times. Apparently, destabilization of nonnative states dramatically enhanced the folding rates.