The natural form of the hairpin ribozyme comprises two major structural elements: a four-way RNA junction and two internal loops carried by adjacent arms of the junction. The ribozyme folds into its active conformation by an intimate association between the loops, and the efficiency of this process is greatly enhanced by the presence of the junction. We have used single-molecule spectroscopy to show that the natural form fluctuates among three distinct states: the folded state and two additional, rapidly interconverting states (proximal and distal) that are inherited from the junction. The proximal state juxtaposes the two loop elements, thereby increasing the probability of their interaction and thus accelerating folding by nearly three orders of magnitude and allowing the ribozyme to fold rapidly in physiological conditions. Therefore, the hairpin ribozyme exploits the dynamics of the junction to facilitate the formation of the active site from its other elements. Dynamic interplay between structural elements, as we demonstrate for the hairpin ribozyme, may be a general theme for other functional RNA molecules.