Vitamin K epoxide reductase (VKOR), an endoplasmic reticulum membrane protein, is the key enzyme for vitamin K-dependent carboxylation, a posttranslational modification that is essential for the biological functions of coagulation factors. VKOR is the target of the most widely prescribed oral anticoagulant, warfarin. However, the topological structure of VKOR and the mechanism of warfarin’s inhibition of VKOR remain elusive. Additionally, it is not clear why warfarin-resistant VKOR mutations identified in patients significantly decrease warfarin’s binding affinity, but have only a minor effect on vitamin K binding. Here, we used immunofluorescence confocal imaging of VKOR in live mammalian cells and PEGylation of VKOR’s endogenous cytoplasmic-accessible cysteines in intact microsomes to probe the membrane topology of human VKOR. Our results show that the disputed loop sequence between the first and second transmembrane (TM) domain of VKOR is located in the cytoplasm, supporting a 3-TM topological structure of human VKOR. Using molecular dynamics (MD) simulations, a T-shaped stacking interaction between warfarin and tyrosine residue 139, within the proposed TY139A warfarin-binding motif, was observed. Furthermore, a reversible dynamic warfarin-binding pocket opening and conformational changes were observed when warfarin binds to VKOR. Several residues (Y25, A26, and Y139) were found essential for warfarin binding to VKOR by MD simulations, and these were confirmed by the functional study of VKOR and its mutants in their native milieu using a cell-based assay. Our findings provide new insights into the dynamics of the binding of warfarin to VKOR, as well as into warfarin’s mechanism of anticoagulation.