The signal recognition particle (SRP), responsible for co-translational protein targeting and delivery to cellular membranes, depends on the native long-hairpin fold of its RNA to confer functionality. Since RNA initiates folding during its synthesis, we used high-resolution optical tweezers to follow in real time the co-transcriptional folding of SRP RNA. Surprisingly, SRP RNA folding is robust to transcription rate changes and the presence or absence of its 5′-precursor sequence. The folding pathway also reveals the obligatory attainment of a non-native hairpin intermediate (H1) that eventually rearranges into the native fold. Furthermore, H1 provides a structural platform alternative to the native fold for RNase P to bind and mature SRP RNA co-transcriptionally. Delays in attaining the final native fold are detrimental to the cell, altogether showing that a co-transcriptional folding pathway underpins the proper biogenesis of function-essential SRP RNA.