The pistol ribozyme (Psr) is among the most recently discovered RNA enzymes and has been the subject of experiments aimed at elucidating the mechanism. Recent biochemical studies have revealed exciting clues about catalytic interactions in the active site not apparent from available crystallographic data. The present work unifies the interpretation of the existing body of structural and functional data on Psr by providing a dynamical model for the catalytically active state in solution from molecular simulation. Our results suggest that a catalytic Mg 2+ ion makes inner-sphere contact with G33:N7 and outer-sphere coordination to the pro-R P of the scissile phosphate, promoting electrostatic stabilization of the dianionic transition state and neutralization of the developing charge of the leaving group through a metal-coordinated water molecule that is made more acidic by a hydrogen bond donated from the 2 ′ ′ ′ ′ ′ OH of P32. This model is consistent with experimental activity-pH and mutagenesis data, including sensitivity to G33(7cG) and phosphorothioate substitution/metal ion rescue. The model suggests several experimentally testable predictions, including the response of cleavage activity to mutations at G42 and P32 positions in the ribozyme, and thio substitutions of the substrate in the presence of different divalent metal ions. Further, the model identifies striking similarities of Psr to the hammerhead ribozyme (HHr), including similar global fold, organization of secondary structure around an active site three-way junction, catalytic metal ion binding mode, and guanine general base. However, the specific binding mode and role of the Mg 2+ ion, as well as a conserved 2 ′ ′ ′ ′ ′ -OH in the active site, are interrelated but subtly different between the ribozymes.