Several lines of evidence indicate that the universally conserved 530 loop of 16S ribosomal RNA plays a crucial role in translation, related to the binding of tRNA to the ribosomal A site. Based upon limited phylogenetic sequence variation, Woese and Gutell (1989) have proposed that residues 524-526 in the 530 hairpin loop are base paired with residues 505-507 in an adjoining bulge loop, suggesting that this region of 16S rRNA folds into a pseudoknot structure. Here, we demonstrate that Watson-Crick interactions between these nucleotides are essential for ribosomal function. Moreover, we find that certain mild perturbations of the structure, for example, creation of G-U wobble pairs, generate resistance to streptomycin, an antibiotic known to interfere with the decoding process. Chemical probing of mutant ribosomes from streptomycin-resistant cells shows that the mutant ribosomes have a reduced affinity for streptomycin, even though streptomycin is thought to interact with a site on the 30S subunit that is distinct from the 530 region. Data from earlier in vitro assembly studies suggest that the pseudoknot structure is stabilized by ribosomal protein S12, mutations in which have long been known to confer streptomycin resistance and dependence.