A stopped-flow fluorescence spectroscopic assay for RNA folding was used to monitor the association of a multicomponent ribozyme derived from group II intron ai5gamma. In the presence of Mg2+, association of a short fluorescein-labeled oligonucleotide substrate with intron domain 1 (D1) resulted in a unique fluorescein emission enhancement, which reflected ribozyme folding and substrate binding. It was found that substrate binding follows a simple bimolecular encounter model, with k(on) approaching the rate of simple duplex formation. The Kd between substrate and D1 was determined to be 11 nM, which is in close agreement with the Kd obtained through oligonucleotide cleavage assays requiring catalytic domain 5 (D5). Ribozyme variants D13 and D135, which contain D3 and/or D5 attached to D1 in-cis, bound substrate with very similar Kd values, suggesting that D1 can fold independently and contains all residues important for ground-state binding to substrate. Both stopped-flow fluorescence assays and chemical modification footprinting data showed that, in all three ribozymes, Mg2+ was required and sufficient for folding. The rates of substrate association and the fraction of active ribozyme showed similar [Mg2+] dependencies, indicating that folding and substrate binding in these three ribozymes are the result of similar processes involving specific, weakly bound Mg2+ ions. The apparent binding constants for the Mg2+ ions were found to be approximately 70 mM in each case. Together, these data show that D1 is an independent folding unit with respect to substrate binding and that specific Mg2+ ions are required for the formation of a distinct tertiary structure in group II introns.