The LYS24/29NLE double mutant of villin headpiece subdomain (HP35) is the fastest folding protein known so far with a folding time constant of 0.6 micros. In this work, the folding mechanism of the mutant has been investigated by both conventional and replica exchange molecular dynamics (CMD and REMD) simulations with AMBER FF03 force field and a generalized-Born solvation model. Direct comparison to the ab initio folding of the wild type HP35 enabled a close examination on the mutational effect on the folding process. The mutant folded to the native state, as demonstrated by the 0.50 A C(alpha)-root mean square deviation (RMSD) sampled in both CMD and REMD simulations and the high population of the folded conformation compared with the denatured conformations. Consistent with experiments, the significantly reduced primary folding free energy barrier makes the mutant closer to a downhill folder than the wild type HP35 that directly leads to the faster transition and higher melting temperature. However, unlike the proposed downhill folding which envisages a smooth shift between unfolded and folded states without transition barrier, we observed a well-defined folding transition that was consistent with experiments. Further examination of the secondary structures revealed that the two mutated residues have higher intrinsic helical preference that facilitated the formation of both helix III and the intermediate state which contains the folded segment helix II/III. Other factors contributing to the faster folding include the more favorable electrostatic interactions in the transition state with the removal of the charged NH(3)(+) groups from LYS. In addition, both transition state ensemble and denatured state ensemble are shifted in the mutant.