Voltage-gated ion channels (VGICs) contain positively charged residues within the S4 helix of the voltage-sensing domain (VSD) that are displaced in response to changes in transmembrane voltage, promoting conformational changes that open the pore. Pacemaker hyperpolarization-activated cyclic nucleotide-gated (HCN) channels are unique among VGICs because their open probability is increased by membrane hyperpolarization rather than depolarization. Here we measured the precise movement of the S4 helix of a sea urchin HCN channel using transition metal ion fluorescence resonance energy transfer (tmFRET). We show that the S4 undergoes a substantial (~10 Å) downward movement in response to membrane hyperpolarization. Furthermore, by applying distance constraints determined from tmFRET experiments to Rosetta modeling, we reveal that the carboxy-terminal part of the S4 helix exhibits an unexpected tilting motion during hyperpolarization activation. These data provide a long-sought glimpse of the hyperpolarized state of a functioning VSD and also a framework for understanding the dynamics of reverse gating in HCN channels.