Density functional theory methods have been used to investigate the hepatitis delta virus (HDV) ribozyme and its catalyzed phosphodiester cleavage. In particular, the effects of the environment's polarity and/or specific hydrogen-bond interactions on the proton affinity of the active site cytosine's N3 ring center have been considered. In addition, the basicities of possible hydrated Mg2+ ion species were also examined. The mechanism previously proposed for the HDV ribozyme in which the active site cytosine (C75) is protonated and thus acts as an acid while the Mg2+ species acts as the complementary base was then investigated. The possible role of tautomerization of C75 is also discussed.