The hammerhead catalytic RNA effects cleavage of the phosphodiester backbone of RNA through a transesterification mechanism that generates products with 2'-3'-cyclic phosphate and 5'-hydroxyl termini. A minimal kinetic mechanism for the intermolecular hammerhead cleavage reaction includes substrate binding, cleavage, and product release. Elemental rate constants for these steps were measured with six hammerhead sequences. Changes in substrate length and sequence had little effect on the rate of the cleavage step, but dramatic differences were observed in the substrate dissociation and product release steps that require helix-coil transitions. Rates of substrate binding and product dissociation correlated well with predictions based on the behavior of simple RNA duplexes, but substrate dissociation rates were significantly faster than expected. Ribozyme and substrate alterations that eliminated catalytic activity increased the stability of the hammerhead complex. These results suggest that substrate destabilization may play a role in hammerhead catalysis.