Phylogenetic comparisons and site-directed mutagenesis indicate that group I introns are composed of a catalytic core that is universally conserved and peripheral elements that are conserved only within intron subclasses. Despite this low overall conservation, peripheral elements are essential for efficient splicing of their parent introns. We have undertaken an in-depth structure-function analysis to investigate the role of one of these elements, P5abc, using the well-characterized ribozyme derived from the Tetrahymena group I intron. Structural comparisons using solution-based free radical cleavage revealed that a ribozyme lacking P5abc (E(DeltaP5abc)) and E(DeltaP5abc) with P5abc added in trans (E(DeltaP5abc).P5abc) adopt a similar global tertiary structure at Mg(2+) concentrations greater than 20 mM [Doherty, E. A., et al. (1999) Biochemistry 38, 2982-90]. However, free E(DeltaP5abc) is greatly compromised in overall oligonucleotide cleavage activity, even at Mg(2+) concentrations as high as 100 mM. Further characterization of E(DeltaP5abc) via DMS modification revealed local structural differences at several positions in the conserved core that cluster around the substrate binding sites. Kinetic and thermodynamic dissection of individual reaction steps identified defects in binding of both substrates to E(DeltaP5abc), with > or =25-fold weaker binding of a guanosine nucleophile and > or =350-fold weaker docking of the oligonucleotide substrate into its tertiary interactions with the ribozyme core. These defects in binding of the substrates account for essentially all of the 10(4)-fold decrease in overall activity of the deletion mutant. Together, the structural and functional observations suggest that the P5abc peripheral element not only provides stability but also positions active site residues through indirect interactions, thereby preferentially stabilizing the active ribozyme structure relative to alternative less active states. This is consistent with the view that peripheral elements engage in a network of mutually reinforcing interactions that together ensure cooperative folding of the ribozyme to its active structure.