Synthetic chemistry techniques have been used to study the functional group requirements of the essential urine residues in hairpin ribozyme cleavage. Three-stranded ribozymes were prepared that had functional group deletions or alterations at single purine sites within loops A and B of the hairpin, and the kinetics of cleavage were compared to those of the unmodified ribozyme. Adenosine analogues used were purine riboside and N-7-deazaadenosine, and guanosine analogues used were inosine, N-7-deazaguanosine, and O-6-methylguanosine. In many cases, introduction of one of these analogues caused substantial loss of ribozyme cleavage activity. Most of the impairments of activity were found to be due to changes in k(cat) rather than in K-M. The losses corresponded in magnitude to loss of at least one hydrogen bond, and the results were rationalized in terms of removal of potential cross-strand hydrogen bonds as well as potential hydrogen-bonds between loops A and B. A new secondary structure model for loop B was proposed. Finally, the magnesium ion dependence of cleavage was studied for the modified ribozymes and compared to that of the unmodified ribozyme. It is proposed that magnesium binds in the ground state to the N-7-positions of G(+1) and A(43) and in the transition state to the N-7-position at A(9). The results provide further evidence for the folding of the two arms of the hairpin so that in the active conformation loops A and B approach closely to form a specific three-dimensional structure with a magnesium ion (or ions) placed between the loops, making contacts in the ground state and in the transition state.