A proton-transfer reaction between squaric acid (H2sq) and 2,3-dimethylpyrazine (2,3-Me2pyz) results in crystallization of a new organic antiferroelectric (AFE), (2,3-Me2pyzH+)(Hsq-)·H2O (1), which possesses a layered structure. The structure of each layer can be described as partitioned into strips lined with methyl groups of the Me2pyzH+ cations and strips featuring extensive hydrogen bonding between the Hsq- anions and water molecules. Variable-temperature dielectric measurements and crystal structures determined through a combination of single-crystal X-ray and neutron diffraction reveal an AFE ordering at 104 K. The phase transition is driven by ordering of protons within the hydrogen-bonded strips. Considering the extent of proton transfer, the paraelectric (PE) state can be formulated as (2,3-Me2pyzH+)2(Hsq23-)(H5O2+), whereas the AFE phase can be described as (2,3-Me2pyzH+)(Hsq-)(H2O). The structural transition caused by the localization of protons results in the change in color from yellow in the PE state to colorless in the AFE state. The occurrence and mechanism of the AFE phase transition have been also confirmed by heat capacity measurements and variable-temperature infrared and Raman spectroscopy. This work demonstrates a potentially promising approach to the design of new electrically ordered materials by engineering molecule-based crystal structures in which hydrogen-bonding interactions are intentionally partitioned into quasi-one-dimensional regions.