Photosystem II (PSII) of oxygenic photosynthesis captures sunlight to drive the catalytic oxidation of water and the reduction of plastoquinone. Among the several redox-active cofactors that participate in intricate electron transfer pathways there are two tyrosine residues, YZ and YD. They are situated in symmetry-related electron transfer branches but have different environments and play distinct roles. YZ is the immediate oxidant of the oxygen-evolving Mn4CaO5 cluster, whereas YD serves regulatory and protective functions. The protonation states and hydrogen-bond network in the environment of YD remain debated, while the role of microsolvation in stabilizing different redox states of YD and facilitating oxidation or mediating deprotonation, as well the fate of the phenolic proton, is unclear. Here we present detailed structural models of YD and its environment using large-scale quantum mechanical models and all-atom molecular dynamics of a complete PSII monomer. The energetics of water distribution within a hydrophobic cavity adjacent to YD are shown to correlate directly with electron paramagnetic resonance (EPR) parameters such as the tyrosyl g-tensor, allowing us to map the correspondence between specific structural models and available experimental observations. EPR spectra obtained under different conditions are explained with respect to the mode of interaction of the proximal water with the tyrosyl radical and the position of the phenolic proton within the cavity. Our results revise previous models of the energetics and build a detailed view of the role of confined water in the oxidation and deprotonation of YD. Finally, the model of microsolvation developed in the present work rationalizes in a straightforward way the biphasic oxidation kinetics of YD, offering new structural insights regarding the function of the radical in biological photosynthesis.