A series of antibiotics was tested for stimulation or inhibition of the hammerhead ribozyme cleavage reaction. Neomycin was found to be a potent inhibitor of the reaction with a Kl of 13.5 microM. Two hammerheads with well-characterized kinetics were used to determine which steps in the reaction mechanism were inhibited by neomycin. The data suggest that neomycin interacts preferentially with the enzyme-substrate complex and that this interaction leads to a reduction in the cleavage rate by stabilizing the ground state of the complex and destabilizing the transition state of the cleavage step. A comparison of neomycin with other aminoglycosides and inhibitors of hammerhead cleavage implies that the ammonium ions of neomycin are important for the antibiotic-hammerhead interaction.