Hammerhead ribozymes are catalytic RNAs with sequence-specific endonucleolytic cleavage activity. They consist of the actual catalytic domain flanked by two antisense arms that bind to the target RNA via Watson-Crick base pairing and form helices I and III. A number of mutational studies have investigated the role of individual nucleotides within the hammerhead structure and their influence on the catalytic properties. A pool of cis-acting hammerhead ribozymes directed against human hepatitis B virus (HBV) X mRNA was constructed. The HBV X protein is known to be an essential trans-activator of viral replication. This pool contains the consensus core sequences, and the binding arms fixed with target-complementary 6 bases and varied with 14 random nucleotides in their flanking sequences. From this pool the RNA molecules with cleavage activity were selected by in vitro selection method. After the 7th round selection cycle, the ribozyme pool was saturated with active ribozymes. Self cleaving ribozymes were cloned after the first, third and 7th rounds of selection, sequenced and characterized. When their energy minimum conformation under the constraints that made the ribozyme sequences to have the hammerhead structure was obtained, the ribozymes with more than 90% cleavage efficiency had folding energy between -10 and -15 kcal/mole. They showed that the optimum length for stem I in this experiment was 5 or 6 base-pairs. No active ribozymes which had stem I longer than 6 base-pairs were selected. In the case of stem III, the length was rather variable from 3 to 9 base-pairs, and no simple relationship between cleavage efficiency and the stem length could be inferred.