Pannexin 1 (Panx1) is an ion channel that releases ATP for signaling in manyfundamental biological contexts. ATP release via Panx1 is achieved by cleaving Panx1’s Cterminal tails and/or by addition of lysolipids. Despite several available structures, the mechanism of how channel cleavage or small molecules can open Panx1 is unclear. Each structure, open or closed, demonstrates Panx1 association as a heptamer with a wide permeation pathway. One prevailing mechanism for ATP release is that the C-terminal tails of Panx1 plug the pore but can be cleaved by proteases to open the pathway for ATP. However, when more of the C-terminus is truncated to widen the pathway further, the channel no longer opens, so there must be additional mechanisms at play. Indeed, electrophysiology studies found a critical domain located in the C-terminus, dubbed C-terminal activating domain (CAD), that must be intact to open the channel. To uncover the significance of this domain, we solved cryo-EM structures of Panx1 lacking the CAD, including the CAD, and including CAD with lysolipids. We found three different conformations with large N-terminal rearrangements that alter the electrostatic free energy of the channel. The N-terminal rearrangements are coupled to the rotation of a loop located immediately after the transmembrane helices on the extracellular side that we named the gating loop. We show that even in the absence of the N-termini, the rotation of the gating loop is sufficient to modulate the electrostatic free energy, demonstrating that the gating loop conformation is the determinant for channel activity. This work is the first to illustrate how the conformational landscape of the channel modulates the electrostatic free energy to govern open and closed states.