The folding of cardiotoxin analogue III (CTX III), a small (60 amino acids), all beta-sheet protein from the venom of the Taiwan Cobra (Naja naja atra) is here investigated. The folding kinetics is monitored by using a variety of techniques such as NMR, fluorescence, and circular dichroism spectroscopy. The folding of the protein is complete within a time scale of 200 ms. The earliest detectable event in the folding pathway of CTX III is the formation of a hydrophobic cluster, which possess strong affinity to bind to nonpolar dye such as 1-anilino-8-napthalene-sulfonic acid. Quenched-flow deuterium-hydrogen exchange experiments indicate that the segment spanning residues 51-55 along with Lys23, Ile39, Val49, Tyr51 and Val52 could constitute the "hydrophobic cluster." Folding kinetics of CTX III based on the amide-protection data reveals that the triple-stranded, antiparallel beta-sheet segment, which is located in the central core of the molecule, appears to fold faster than the double-stranded beta-sheet segment.