The toxicity of palytoxin is due to its binding to external part of Na/K-ATPase (the sodium–potassium pump), where it interacts with the natural binding site of ouabain with very high affinity. Na/K-ATPase is a transmembrane protein, which is found on the surface of every vertebrate cell. The sodium–potassium pump is necessary for viability of all cells, and this explains the fact that palytoxin affects all cells. Through this channel, which it forms within the sodium–potassium pump, monovalent positive ions such as sodium and potassium can diffuse freely, thereby destroying the ion gradient of the cell. Once palytoxin is bound to the pump, it flips constantly between open and normal conformations. The open conformation is more likely (over 90% probability). If palytoxin detaches, the pump will return to closed conformation. In open conformation, millions of ions diffuse through the pump per second, whereas only about one hundred ions per second are transported through a normally functioning transporter.
Loss of ion gradient leads to death and hemolysis of red blood cells, for example, and also to violent contractions of heart and other muscle cells.
First evidence of the mechanism described above was obtained in 1981 and the proposed mechanism was published in 1982. Because the mechanism of action of palytoxin was so unlike any other, it was initially not widely accepted. This was primarily because it was not expected that a pump which provides active transport, could become an ion channel by binding of a compound such as palytoxin. Therefore, there were some alternative hypotheses, which were reviewed by Frelin and van Renterghem in 1995. The breakthrough research which is seen as proof for the sodium–potassium pump mechanism was performed in yeast cells (Saccharomyces cerevisiae). These cells do not have the sodium–potassium pump, and hence palytoxin does not affect them. But once they were given the DNA to encode for complete sheep Na/K-ATPase, they were killed by palytoxin.