Exploitation of ribozymes in a practical setting requires high catalytic activity and strong specificity. The hammerhead ribozyme R32 has considerable potential in this regard since it has very high catalytic activity. In this study, we have examined how R32 recognizes and cleaves a specific substrate, focusing on the mechanism behind the specificity. Comparing rates of cleavage of a substrate in a mixture that included the correct substrate and various substrates with point mutations, we found that R32 cleaved the correct substrate specifically and at a high rate. To clarify the source of this strong specificity, we quantified the weak interactions between R32 and various truncated substrates, using truncated substrates as competitive inhibitors since they were not readily cleaved during kinetic measurements of cleavage of the correct substrate, S11. We found that the strong specificity of the cleavage reaction was due to a closed form of R32 with a hairpin structure. The self-complementary structure within R32 enabled the ribozyme to discriminate between the correct substrate and a mismatched substrate. Since this hairpin motif did not increase the Km (it did not inhibit the binding interaction) or decrease the kcat (it did not decrease the cleavage rate), this kind of hairpin structure might be useful for the design of new ribozymes with strong specificity and high activity.