Modulation of cellular energy expenditure is fundamental to normal and pathological cell growth and differentiation. Mitochondria stores energy as a proton gradient across their inner membrane. Uncoupling proteins (UCPs) can dissipate the gradient to produce heat or regulate metabolite fluxes. UCP-mediated proton currents require fatty acids (FAs) and are blocked by nucleotides, but the molecular basis of these processes is unknown. We find, by nuclear magnetic resonance and functional mutagenesis, that UCP2 can bind FAs laterally through its peripheral site, and this intramembrane molecular recognition is essential for UCP2-catalyzed FA flipping across the membrane, which in turn is essential for proton translocation. The antagonist GDP binds inside the UCP2 cavity and perturbs its conformation, which can displace FA from the peripheral site as a mean of inhibiting proton currents. Our data provide a biophysical perspective of the intricate interplay of UCPs, FA, and nucleotides in determining proton fluxes in mitochondria.