Ions interacting with hydrated RNA play a central role in defining its secondary and tertiary structure. While spatial arrangements of ions, water molecules, and phosphate groups have been inferred from X-ray studies, the role of electrostatic and other noncovalent interactions in stabilizing compact folded RNA structures is not fully understood at the molecular level. Here, we demonstrate that contact ion pairs of magnesium (mg(2+)) and phosphate groups embedded in local water shells stabilize the tertiary equilibrium structure of transfer RNA (tRNA). Employing dialyzed tRNA(Phe) from yeast and tRNA from Escherichia coli, we follow the population of Mg2+ sites close to phosphate groups of the ribose-phosphodiester backbone step by step, combining linear and nonlinear infrared spectroscopy of phosphate vibrations with molecular dynamics simulations and ab initio vibrational frequency calculations. The formation of up to six Mg2+/phosphate contact pairs per tRNA and local field-induced reorientations of water molecules balance the phosphate-phosphate repulsion in nonhelical parts of tRNA, thus stabilizing the folded structure electrostatically. Such geometries display limited sub-picosecond fluctuations in the arrangement of water molecules and ion residence times longer than 1 mu s. At higher Mg2+ excess, the number of contact ion pairs per tRNA saturates around 6 and weakly interacting ions prevail. Our results suggest a predominance of contact ion pairs over long-range coupling of the ion atmosphere and the biomolecule in defining and stabilizing the tertiary structure of tRNA.