The nucleolytic ribozymes catalyse site-specific phosphodiester cleavage and ligation transesterification reactions in RNA. The hairpin ribozyme folds to generate an intimate loop-loop interaction to create the local environment in which catalysis can proceed. We have studied the ion-induced folding using single-molecule FRET experiments, showing that the four-way helical junction accelerates the folding 500-fold by introducing a discrete intermediate that juxtaposes the loops. Using FRET we can observe individual hairpin ribozyme molecules as they undergo multiple cycles of cleavage and ligation, and measure the rates of the internal reactions, free of uncertainties in the contributions of docking and substrate dissociation processes. On average, the cleaved ribozyme undergoes several docking-undocking events before a ligation reaction occurs. On the basis of these experiments, we have explored the role of the nucleobases G8 and A38 in the catalysis. Both cleavage and ligation reactions are pH dependent, corresponding to the titration of a group with pKa=6.2. We have used a novel ribonucleoside in which these bases are replaced by imidazole to investigate the role of acid-base catalysis in this ribozyme. We observe significant rates of cleavage and ligation, and a bell-shaped pH dependence for both.