Type IV P-type ATPases (P4-ATPases) catalyze translocation of phospholipid across a membrane to establish an asymmetric bilayer structure with phosphatidylserine (PS) and phosphatidylethanolamine (PE) restricted to the cytosolic leaflet. The mechanism for how P4-ATPases recognize and flip phospholipid is unknown, and is described as the "giant substrate problem" because the canonical substrate binding pockets of homologous cation pumps are too small to accommodate a bulky phospholipid. Here, we identify residues that confer differences in substrate specificity between Drs2 and Dnf1, Saccharomyces cerevisiae P4-ATPases that preferentially flip PS and phosphatidylcholine (PC), respectively. Transplanting transmembrane segments 3 and 4 (TM3-4) of Drs2 into Dnf1 alters the substrate preference of Dnf1 from PC to PS. Acquisition of the PS substrate maps to a Tyr618Phe substitution in TM4 of Dnf1, representing the loss of a single hydroxyl group. The reciprocal Phe511Tyr substitution in Drs2 specifically abrogates PS recognition by this flippase causing PS exposure on the outer leaflet of the plasma membrane without disrupting PE asymmetry. TM3 and the adjoining lumenal loop contribute residues important for Dnf1 PC preference, including Phe587. Modeling of residues involved in substrate selection suggests a novel P-type ATPase transport pathway at the protein/lipid interface and a potential solution to the giant substrate problem.