The ribozyme derived from the intron of Tetrahymena thermophila pre-rRNA catalyzes a site-specific endonuclease reaction with both RNA and DNA oligonucleotides. The total transition-state stabilization by the ribozyme, encompassing the binding and chemical steps, is 4.8 kcal/mol greater with a single ribose at the cleavage site relative to the all-deoxyribose substrate. Here we show that this effect is specific to the chemical transition state, with a contribution of only approximately 0.7 kcal/mol toward binding. Substrates with a series of 2'-substituents, -OH(ribo), -F2 (2',2'-difluoro-2'-deoxyribo), F(2'-fluoro-2'-deoxyribo), and -H(deoxyribo), follow a linear free energy relationship between the rate of the chemical step of the ribozyme-catalyzed reaction and the pK(a) of the leaving group, with slope beta leaving group approximately -0.8. Because proton donation to the 3'-oxygen atom from a general acid of the ribozyme would be expected to render the rate insensitive to the pK(a) of the leaving group, it is suggested that this ribozyme does not employ general acid catalysis. The 2'-OCH3 (2'-methoxy-2'-deoxyribo) substituent does not follow this correlation, apparently due to steric hindrance within the active site. The rate of cleavage of the 2'-substituted substrates by the ribozyme follows the order 2'-F2 > -F > -H, suggestive of an inductive effect, i.e., acceleration of the reaction by electron-withdrawing groups. The 2'-OH group provides the largest transition-state stabilization. Because of uncertainty in the relative effect of the 2'-OH and 2'-H substituents on the pK(a) of the neighboring 3'-oxygen leaving group, we do not discount the possibility of interactions between the 2'-hydroxyl group and the ribozyme that further enhance reactivity. Nevertheless, the 2'-OH effect can be explained at least partially by an intramolecular hydrogen bond to an incipient oxyanion at the neighboring 3'-position. This oxyanion is forming as the phosphodiester bond is breaking, explaining why the stabilization is specific to the transition state. Analogous differential hydrogen bonding might be widely used by enzymes to achieve selective transition-state stabilization.