The family of polypeptide GalNAc-transferases (GalNAc-Ts) orchestrates the initiating step of mucin-type protein O-glycosylation by transfer of GalNAc moieties to serine and threonine residues in proteins. Deficiencies and dysregulation of GalNAc-T isoenzymes have been found to be related to different diseases. Recently, we have demonstrated that an inactive GalNAc-T2 mutant (F104S), which is not located at the active site, induces low levels of high-density lipoprotein cholesterol (HDL-C) in humans. Here, we have deciphered the molecular basis for F104S mutant inactivation. Saturation transfer difference NMR experiments demonstrate that the mutation induces loss of binding to peptide substrates. The analysis of the crystal structure of the F104S mutant bound to UDP-GalNAc, combined with molecular dynamics (MD) simulations, has revealed that the flexible loop is disordered and displays larger conformational changes in the mutant enzyme than in the wild-type (WT) enzyme. 19F-NMR experiments reveal that the WT enzyme reaches the active state only in the presence of UDP-GalNAc, providing compelling evidences that GalNAc-T2 adopts an UDP-GalNAc-dependent induced-fit mechanism. The F104S mutation precludes the enzyme to achieve the active conformation and concomitantly to bind peptide substrates. The present study provides new insights into the catalytic mechanism of the large family of GalNAc-Ts and how these enzymes orchestrate protein O-glycosylation.