The proprotein convertase furin requires the pH gradient of the secretory pathway to regulate its multistep, compartment-specific autocatalytic activation. Although His-69 within the furin prodomain serves as the pH sensor that detects transport of the propeptide-enzyme complex to the trans-Golgi network, where it promotes cleavage and release of the inhibitory propeptide, a mechanistic understanding of how His-69 protonation mediates furin activation remains unclear. Here we employ biophysical, biochemical, and computational approaches to elucidate the mechanism underlying the pH-dependent activation of furin. Structural analyses and binding experiments comparing the wild-type furin propeptide with a nonprotonatable His-69 → Leu mutant that blocks furin activation in vivo revealed protonation of His-69 reduces both the thermodynamic stability of the propeptide as well as its affinity for furin at pH 6.0. Structural modeling combined with mathematical modeling and molecular dynamic simulations suggested that His-69 does not directly contribute to the propeptide-enzyme interface but, rather, triggers movement of a loop region in the propeptide that modulates access to the cleavage site and, thus, allows for the tight pH regulation of furin activation. Our work establishes a mechanism by which His-69 functions as a pH sensor that regulates compartment-specific furin activation and provides insights into how other convertases and proteases may regulate their precise spatiotemporal activation.