P4-ATPases (flippases) translocate specific phospholipids such as phosphatidylserine from the exoplasmic leaflet of the cell membrane to the cytosolic leaflet, upholding an essential membrane asymmetry. The mechanism of flipping this giant substrate has remained an enigma. We have investigated the importance of amino acid residues in transmembrane segment M4 of mammalian P4-ATPase ATP8A2 by mutagenesis. In the related ion pumps Na+, K+-ATPase and Ca2+-ATPase, M4 moves during the enzyme cycle, carrying along the ion bound to a glutamate. In ATP8A2, the corresponding residue is an isoleucine, which recently was found mutated in patients with cerebellar ataxia, mental retardation, and dysequilibrium syndrome. Our analyses of the lipid substrate concentration dependence of the overall and partial reactions of the enzyme cycle in mutants indicate that, during the transport across the membrane, the phosphatidylserine head group passes near isoleucine-364 (I364) and that I364 is critical to the release of the transported lipid into the cytosolic leaflet. Another M4 residue, N359, is involved in recognition of the lipid substrate on the exoplasmic side. Our functional studies are supported by structural homology modeling and molecular dynamics simulations, suggesting that I364 and adjacent hydrophobic residues function as a hydrophobic gate that separates the entry and exit sites of the lipid and directs sequential formation and annihilation of water-filled cavities, thereby enabling transport of the hydrophilic phospholipid head group in a groove outlined by the transmembrane segments M1, M2, M4, and M6, with the hydrocarbon chains following passively, still in the membrane lipid phase.