Binding of the Tetrahymena ribozyme's oligonucleotide substrate represents a local folding event in the context of a globally folded RNA. Substrate binding involves P1 duplex formation with the ribozyme's internal guide sequence to give an "open complex', followed by docking of the P1 duplex into tertiary interactions to give a "closed complex'. We have isolated the open complex as a thermodynamically stable species using a site-specific modification and high Na+ concentrations. This has allowed characterization of P1 docking, which represents a folding transition between local secondary and local tertiary structure. P1 docking is entropically driven, possibly accompanied by a release of bound water molecules. Strategies analogous to those described here can be used more generally to study local folding events in large structured RNAs and to explore the structural and energetic landscape for RNA folding.