The recent crystal structure of Orai, the pore unit of a calcium release-activated calcium (CRAC) channel, is used as the starting point for molecular dynamics and free-energy calculations designed to probe this channel's conduction properties. In free molecular dynamics simulations, cations localize preferentially at the extracellular channel entrance near the ring of Glu residues identified in the crystal structure, whereas anions localize in the basic intracellular half of the pore. To begin to understand ion permeation, the potential of mean force (PMF) was calculated for displacing a single Na(+) ion along the pore of the CRAC channel. The computed PMF indicates that the central hydrophobic region provides the major hindrance for ion diffusion along the permeation pathway, thereby illustrating the nonconducting nature of the crystal structure conformation. Strikingly, further PMF calculations demonstrate that the mutation V174A decreases the free energy barrier for conduction, rendering the channel effectively open. This seemingly dramatic effect of mutating a nonpolar residue for a smaller nonpolar residue in the pore hydrophobic region suggests an important role for the latter in conduction. Indeed, our computations show that even without significant channel-gating motions, a subtle change in the number of pore waters is sufficient to reshape the local electrostatic field and modulate the energetics of conduction, a result that rationalizes recent experimental findings. The present work suggests the activation mechanism for the wild-type CRAC channel is likely regulated by the number of pore waters and hence pore hydration governs the conductance.