Two pore channels (TPCs) are two-fold symmetric endo-lysosomal cation channels forming important drug targets especially for antiviral drugs. They are activated by calcium, ligand binding, and membrane voltage, and to date, are the only ion channels shown to alter their ion selectivity depending on the type of bound ligand. However, despite their importance in the field, ligand activation of TPCs and the molecular mechanisms underlying their ion selectivity are still poorly understood. Here, we set out to elucidate the mechanistic basis for the ion selectivity of human TPC2 (hTPC2) and the molecular mechanism of ligand-induced channel activation by the lipid PI(3,5)P2. We performed all-atom in silico electrophysiology simulations to study Na+and Ca2+permeation across hTPC2 in real-time and to investigate the conformational changes induced by the presence or absence of bound PI(3,5)P2. Our findings reveal that hTPC2 adopts distinct structures depending on the presence of PI(3,5)P2and elucidate the conformational transition pathways between these structures. Additionally, we examined the permeation mechanism, solvation states, and binding sites of ions during ion permeation through the pore. Our simulations reproduce the experimental observation that hTPC2 is more selective for Na+over Ca2+ions in the presence of PI(3,5)P2and explain the mechanism of this ion selectivity. They highlight the importance of specific ion binding sites at the luminal channel entrance, the selectivity filter, and the central channel cavity for ion conduction, enabling a distant knock-on mechanism for efficient permeation of Na+ions.