Full sequence design protein FSD-1 is a designed protein based on the motif of zinc finger protein. In this work, its folding mechanism and thermal stability are investigated using the replica exchange molecular dynamics model with the water molecules being treated explicitly. The results show that the folding of the FSD-1 is initiated by the hydrophobic collapse, which is accompanied with the formation of the C-terminal alpha-helix. Then the folding proceeds with the formation of the beta-hairpin and the further package of the hydrophobic core. Compared with the beta-hairpin, the alpha-helix has much higher stability. It is also found that the N-capping motif adopted by the FSD-1 contributes to the stability of the alpha-helix dramatically. The hydrophobic contacts made by the side chain of Tyr3 in the native state are essential for the stabilization of the beta-hairpin. It is also found that the folding of the N-terminal beta-hairpin and the C-terminal alpha-helix exhibits weak cooperativity, which is consistent with the experimental data. Meanwhile, the folding pathway is compared between the FSD-1 and the target zinc finger peptide, and the possible role of the zinc ion on the folding pathway of zinc finger is proposed. Proteins 2007. (c) 2007 Wiley-Liss, Inc.