The kinetics of formation of protein structural motifs (e.g., alpha-helices and beta-hairpins) can provide information about the early events in protein folding. A recent study has used fluorescence measurements to monitor the folding thermodynamics and kinetics of a 16-residue beta-hairpin. In the present paper, we obtain the free energy surface and conformations involved in the folding of an atomistic model for the beta-hairpin from multicanonical Monte Carlo simulations. The results suggest that folding proceeds by a collapse that is downhill in free energy, followed by rearrangement to form a structure with part of the hydrophobic cluster; the hairpin hydrogen bonds propagate outwards in both directions from the partial cluster. Such a folding mechanism differs from the published interpretation of the experimental results, which is based on a helix-coil-type phenomenological model.