We have solved the crystal structure of an all-RNA hammerhead ribozyme having a single 2'-O-methyl cytosine incorporated at the active site to prevent cleavage. The conditions used differ from those in another recent solution in four significant ways: first, it is an all-RNA ribozyme rather than a DNA-RNA hybrid; second, the connectivity of the ribozyme backbone strands is different; third, the crystals were grown in the presence of a much lower concentration of salt; and fourth, the crystal packing scheme is very different. Nevertheless, the three-dimensional structure of the all-RNA hammerhead ribozyme is similar to the previous structure. Five potential Mg(II)-binding sites are identified, including one positioned near the ribozyme catalytic pocket. Upon this basis, as well as upon comparisons with the metal-binding sites in the structurally homologous uridine turn of tRNAPhe, we propose a mechanism for RNA catalytic cleavage.