One controversial area in protein folding mechanisms is whether some small, ultra-fast-folding proteins exist in distinct native and denatured state ensembles, separated by an energy barrier, or if there is a continuum of states between native and denatured. In theory, the simplest way of distinguishing between single-state barrierless or "downhill" folding and conventional separate state folding is by single-molecule spectroscopy, which can detect either distinct populations of proteins or a continuum. But, the time resolution of approximately 1 ms of most confocal fluorescence microscopes for single-molecule fluorescence resonance energy transfer (SM-FRET) is longer than that for the structural relaxation of proteins such as BBL, whose mechanism of folding is controversial. We have constructed a highly sensitive confocal fluorescence microscope and measured the distribution of FRET efficiencies of appropriately labeled BBL in time bins of 50 and 200 mus under conditions in which its structural relaxation time is 340 mus or less. The experiments are at the very limits of detection because of signal artefacts from shot noise, photo-bleaching, and other events that broaden signals of individual states so they appear to coalesce. However, with appropriate tuning of the thresholds for detection and length of data collection, we clearly observed 2 distinct states of BBL, with FRET efficiencies corresponding to native and denatured states. The population of each state varied with GdmCl or urea during chemical denaturation transitions corresponding to conventional barrier-limited folding at 279 K and pH 7 and pH 5.8. The folding of BBL is accordingly barrier limited.