Cotranscriptional folding is an obligate step of RNA biogenesis that can guide RNA structure formation and function through transient intermediate folds. This process is particularly important for transcriptional riboswitches in which the formation of ligand-dependent structures during transcription regulates downstream gene expression. However, the intermediate structures that comprise cotranscriptional RNA folding pathways, and the mechanisms that enable transit between them, remain largely unknown. Here, we determine the series of cotranscriptional folds and rearrangements that mediate antitermination by the Clostridium beijerinckii pfl ZTP riboswitch in response to the purine biosynthetic intermediate ZMP. We uncover sequence and structural determinants that modulate an internal RNA strand displacement process and identify biases within natural ZTP riboswitch sequences that promote on-pathway folding. Our findings establish a mechanism for pfl riboswitch antitermination and suggest general strategies by which nascent RNA molecules navigate cotranscriptional folding pathways.