Loop-loop tertiary interactions play a key role in the folding and catalytic activity of natural hammerhead ribozymes. Using a combination of NMR spectroscopy, site-directed mutagenesis and kinetic and infectivity analyses, we have examined the structure and function of loops 1 and 2 of the (+) and (-) hammerheads of chrysanthemum chlorotic mottle viroid RNA. In both hammerheads, loop 1 is a heptanucleotide hairpin loop containing an exposed U at its 5' side and an extrahelical U at its 3'-side critical for the catalytic activity of the ribozyme in vitro and for viroid infectivity in vivo, whereas loop 2 has a key opened A at its 3'-side. These structural features promote a specific loop-loop interaction motif across the major groove. The essential features of this tertiary structure element, base pairing between the 5' U of loop 1 and the 3' A of loop 2, and interaction of the extrahelical pyrimidine of loop 1 with loop 2, are likely shared by a significant fraction of natural hammerheads.