Pseudoknot formation in the core region of the telomerase RNA has been demonstrated to be important for telomerase activity in vertebrates, ciliates, and yeast. Characterization of the Saccharomyces cerevisiae telomerase RNA (TLC1) pseudoknot identified tertiary structural interactions that are also important for telomerase activity, as previously observed for the Kluyveromyces lactis and human telomerase RNA pseudoknots. In addition, the contributions of backbone ribose 2'-OH groups in the pseudoknot to telomerase catalysis were investigated previously, using 2'-OH (ribose) to 2'-H (deoxyribose) or 2'-O-methyl substitutions in the stem 2 helix, and it was proposed that one or more 2'-OH groups from the stem 2 sequences at or near the triple helix participate in telomerase catalysis. Based on these studies and investigations of the structural and thermodynamic properties of the TLC1 RNA pseudoknot region, we have examined the structural and thermodynamic perturbations of the 2'-O-methyl and 2'-H substituted pseudoknots, using UV-monitored thermal denaturation, native gel electrophoresis, and circular dichroism spectroscopy. Our results demonstrate the presence of A-form helical geometry perturbations in the backbone sugar substituted pseudoknots, show a correlation between thermodynamic stability and telomerase activity, and are consistent with the identification of the U809 ribose 2'-OH as a potential contributor to telomerase activity.