We have measured changes in heat capacity, entropy, and enthalpy for each step in the folding reaction of CD2.d1 and evaluated the effects of core mutations on these properties. All wild-type and mutant forms fold through a rapidly formed intermediate state that precedes the rate-limiting transition state. Mutations have a pronounced effect on the enthalpy of both the intermediate and folded states, but in all cases a compensatory change in entropy results in a small net free-energy change. While the enthalpy change in the folded state can be attributed to a loss of van der Waals interactions, it has already been shown that changes in the stability of the intermediate are dominated by changes in secondary structure propensity [Lorch et al. (1999) Biochemistry 38, 1377−1385]. It follows that the thermodynamic basis of β-propensity is enthalpic in origin. The effects of mutations on the enthalpy and entropy of the transition state are smaller than on the ground states. This relative insensitivity to mutation is discussed in the light of theories concerning the nature of the rate-limiting barrier in folding reactions.