The twister RNA is a recently discovered nucleolytic ribozyme that is present in both bacteria and eukarya. While its biological role remains unclear, crystal structure analyses and biochemical approaches have revealed critical features of its catalytic mechanism. Here, we set out to explore dynamic aspects of twister RNA folding along the cleavage reaction coordinate. To do so, we have employed both bulk and single-molecule fluorescence resonance energy transfer (FRET) methods to investigate a set of twister RNAs with labels strategically positioned at communicating segments. The data reveal that folding of the central pseudoknot (T1), the most crucial structural determinant to promote cleavage, exhibits reversible opening and closing dynamics at physiological Mg(2+) concentration. Uncoupled folding, in which T1 formation precedes structuring for closing of stem P1, was confirmed using pre-steady-state three-color smFRET experiments initiated by Mg(2+) injection. This finding suggests that the folding path of twister RNA requires proper orientation of the substrate prior to T1 closure such that the U5-A6 cleavage site becomes embraced to achieve its cleavage competent conformation. We also find that the cleaved 3'-fragment retains its compacted pseudoknot fold, despite the absence of the phylogenetically conserved stem P1, rationalizing the poor turnover efficiency of the twister ribozyme.