MJ0366 from Methanocaldococcus jannaschii is the smallest topologically knotted protein known to date. With 92 residues in length, MJ0366 ties a trefoil (31) knot by threading its C-terminal helix through a buttonhole formed by the remainder of the secondary structure elements. By generating a library of point mutations at positions pertinent to the knot formation, we systematically evaluated the contributions of individual residues to the folding stability and kinetics of MJ0366. The experimental Φ-values were used as restrains to computationally generate an ensemble of conformations that correspond to the transition state of MJ0366, which revealed several non-native contacts. The importance of these non-native contacts in stabilizing the transition state of MJ0366 was confirmed by a second round of mutagenesis, which also established the pivotal role of F15 in stapling the network of hydrophobic interactions around the threading C-terminal helix. Our converging experimental and computational results show that, despite the small size, the transition state of MJ0366 is formed at a very late stage of the folding reaction coordinate, following a polarized pathway. Eventually, the formation of extensive native contacts as well as a number of non-native ones leads to the threading of the C-terminal helix that defines the topological knot.