The thermal unfolding of a series of 6-, 10-, and 14-mer cyclic beta-hairpin peptides was studied to gain insight into the mechanism of formation of this important secondary structure. The thermodynamics of the transition were characterized using temperature dependent Fourier transform infrared spectroscopy. Thermodynamic data were analyzed using a two-state model which indicates increasing cooperativity along the series. The relaxation kinetics of the peptides in response to a laser induced temperature jump were probed using time-resolved infrared spectroscopy. Single exponential relaxation kinetics were observed and fit with a two-state model. The folding rate determined for these cyclic peptides is accelerated by some two orders of magnitude over the rate of a linear peptide that forms a beta-hairpin. This observation supports the argument that the rate limiting step in the linear system is either stabilization of compact collapsed structures or rearrangement of collapsed structures over a barrier to achieve the native interstrand registry. Small activation energies for folding of these peptides obtained from an Arrhenius analysis of the rates imply a primarily entropic barrier, hence an organized transition state having specific stabilizing interactions.