The alternative oxidase (AOX) is a membrane-bound di-iron enzyme that catalyzes O2-driven quinol oxidation in the respiratory chains of plants, fungi, and several pathogenic protists of biomedical and industrial interest. Yet, despite significant biochemical and structural efforts over the last decades, the catalytic principles of AOX remain poorly understood. We develop here multi-scale quantum and classical molecular simulations in combination with biochemical experiments to address the proton-coupled electron transfer (PCET) reactions responsible for catalysis in AOX from Trypanosoma brucei, the causative agent of sleeping sickness. We show that AOX activates and splits dioxygen via a water-mediated PCET reaction, resulting in a high-valent ferryl/ferric species and tyrosyl radical (Tyr220˙) that drives the oxidation of the quinol via electric field effects. We identify conserved carboxylates (Glu215, Asp100) within a buried cluster of ion-pairs that act as a transient proton-loading site in the quinol oxidation process, and validate their function experimentally with point mutations that result in drastic activity reduction and pK a-shifts. Our findings provide a key mechanistic understanding of the catalytic machinery of AOX, as well as a molecular basis for rational drug design against energy transduction chains of parasites. On a general level, our findings illustrate how redox-triggered conformational changes in ion-paired networks control the catalysis via electric field effects.