A new paradigm for cellulose depolymerization by fungi focuses on an oxidative mechanism involving cellobiose dehydrogenases (CDH) and copper-dependent lytic polysaccharide monooxygenases (LPMO); however, mechanistic studies have been hampered by the lack of structural information regarding CDH. CDH contains a haem-binding cytochrome (CYT) connected via a flexible linker to a flavin-dependent dehydrogenase (DH). Electrons are generated from cellobiose oxidation catalysed by DH and shuttled via CYT to LPMO. Here we present structural analyses that provide a comprehensive picture of CDH conformers, which govern the electron transfer between redox centres. Using structure-based site-directed mutagenesis, rapid kinetics analysis and molecular docking, we demonstrate that flavin-to-haem interdomain electron transfer (IET) is enabled by a haem propionate group and that rapid IET requires a closed CDH state in which the propionate is tightly enfolded by DH. Following haem reduction, CYT reduces LPMO to initiate oxygen activation at the copper centre and subsequent cellulose depolymerization.