Pathological alteration of TDP-43 (TAR DNA-binding protein-43), a protein involved in various RNA-mediated processes, is a hallmark feature of the neurodegenerative diseases amyotrophic lateral sclerosis and frontotemporal lobar degeneration. Fragments of TDP-43, composed of the second RNA recognition motif (RRM2) and the disordered C terminus, have been observed in cytoplasmic inclusions in sporadic amyotrophic lateral sclerosis cases, suggesting that conformational changes involving RRM2 together with the disordered C terminus play a role in aggregation and toxicity. The biophysical data collected by CD and fluorescence spectroscopies reveal a three-state equilibrium unfolding model for RRM2, with a partially folded intermediate state that is not observed in RRM1. Strikingly, a portion of RRM2 beginning at position 208, which mimics a cleavage site observed in patient tissues, increases the population of this intermediate state. Mutually stabilizing interactions between the domains in the tethered RRM1 and RRM2 construct reduce the population of the intermediate state and enhance DNA/RNA binding. Despite the high sequence homology of the two domains, a network of large hydrophobic residues in RRM2 provides a possible explanation for the increased stability of RRM2 compared with RRM1. The cluster analysis suggests that the intermediate state may play a functional role by enhancing access to the nuclear export signal contained within its sequence. The intermediate state may also serve as a molecular hazard linking productive folding and function with pathological misfolding and aggregation that may contribute to disease.