Noncoding RNAs must function in the crowded environment of the cell. Previous small-angle x-ray scattering experiments showed that molecular crowders stabilize the structure of the Azoarcus group I ribozyme, allowing the ribozyme to fold at low physiological Mg2+ concentrations. Here, we used an RNA cleavage assay to show that the PEG and Ficoll crowder molecules increased the biochemical activity of the ribozyme, whereas sucrose did not. Crowding lowered the Mg2+ threshold at which activity was detected and increased total RNA cleavage at high Mg2+ concentrations sufficient to fold the RNA in crowded or dilute solution. After correcting for solution viscosity, the observed reaction rate was proportional to the fraction of active ribozyme. We conclude that molecular crowders stabilize the native ribozyme and favor the active structure relative to compact inactive folding intermediates. © 2014 by The American Society for Biochemistry and Molecular Biology, Inc.