We study the folding mechanism of a three-helix bundle protein at atomic resolution, including effects of explicit water. Using replica exchange molecular dynamics we perform enough sampling over a wide range of temperatures to obtain the free energy, entropy, and enthalpy surfaces as a function of structural reaction coordinates. Simulations were started from different configurations covering the folded and unfolded states. Because many transitions between all minima at the free energy surface are observed, a quantitative determination of the free energy barriers and the ensemble of configurations associated with them is now possible. The kinetic bottlenecks for folding can be determined from the thermal ensembles of structures on the free energy barriers, provided the kinetically determined transition-state ensembles are similar to those determined from free energy barriers. A mechanism incorporating the interplay among backbone ordering, sidechain packing, and desolvation arises from these calculations. Large Phi values arise not only from native contacts, which mostly form at the transition state, but also from contacts already present in the unfolded state that are partially destroyed at the transition.