Water permeation through rat aquaporin-4 (rAQP4), predominantly found in mammalian brain is regulated by phosphorylation of Ser-180. The present study has been carried out to understand the structural mechanism of regulation of water permeability across the channel. Molecular dynamics (MD) simulations have been carried out to investigate the structural changes caused due to phosphorylation of Ser-180 in the tetrameric assembly of rAQP4 along with predicted C-terminal region (255–323). The interactions involving opposite charges are observed between cytoplasmic loops and the C-terminal region during MD simulations. This results in movement of C-terminal region of rAQP4 towards the cytoplasmic mouth of water channel. Despite this movement, there was a gap between C-terminal region and cytoplasmic mouth of the channel through which water molecules were able to gain entry into the channel. The interactions between C-terminus and loop D of neighboring monomers in a tetrameric assembly appear to prevent the complete closure of cytoplasmic mouth of the water channel. Further, the rates of water permeation through phosphorylated and unphosphorylated rAQP4 have also been compared. The simulation studies showed a continuous movement of water in a single file across pore of unphosphorylated as well as phosphorylated rAQP4.