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Rotary vacuolar adenosine triphosphatases (V-ATPases) drive transmembrane proton transport through a V o proton channel subcomplex. Despite recent high-resolution structures of several rotary ATPases, the dynamic mechanism of proton pumping remains elusive. Here, we determined a 2.7-Å cryo–electron microscopy (cryo-EM) structure of yeast V o proton channel in nanodisc that reveals the location of ordered water molecules along the proton path, details of specific protein-lipid interactions, and the architecture of the membrane scaffold protein. Moreover, we uncover a state of V o that shows the c -ring rotated by ~14°. Molecular dynamics simulations demonstrate that the two rotary states are in thermal equilibrium and depict how the protonation state of essential glutamic acid residues couples water-mediated proton transfer with c -ring rotation. Our cryo-EM models and simulations also rationalize a mechanism for inhibition of passive proton transport as observed for free V o that is generated as a result of V-ATPase regulation by reversible disassembly in vivo.