The hammerhead ribozyme is one of the best-studied small RNA enzymes, yet is mechanistically still poorly understood. We measured the Mg(2+) dependencies of folding and catalysis for two distinct hammerhead ribozymes, HHL and HH alpha. HHL has three long helical stems and was previously used to characterize Mg(2+)-induced folding. HH alpha has shorter stems and an A.U tandem next to the cleavage site that increases activity approximately 10-fold at 10 mM Mg(2+). We find that both ribozymes cleave with fast rates (5-10 min(-1), at pH 8 and 25 degrees C) at nonphysiologically high Mg(2+) concentrations, but with distinct Mg(2+) dissociation constants for catalysis: 90 mM for HHL and 10 mM for HH alpha. Using time-resolved fluorescence resonance energy transfer, we measured the stem I-stem II distance distribution as a function of Mg(2+) concentration, in the presence and absence of 100 mM Na(+), at 4 and 25 degrees C. Our data show two structural transitions. The larger transition (with Mg(2+) dissociation constants in the physiological range of approximately 1 mM, below the catalytic dissociation constants) brings stems I and II close together and is hindered by Na(+). The second, globally minor, rearrangement coincides with catalytic activation and is not hindered by Na(+). Additionally, the more active HH alpha exhibits a higher flexibility than HHL under all conditions. Finally, both ribozyme-product complexes have a bimodal stem I-stem II distance distribution, suggesting a fast equilibrium between distinct conformers. We propose that the role of diffusely bound Mg(2+) is to increase the probability of formation of a properly aligned catalytic core, thus compensating for the absence of naturally occurring kissing-loop interactions.