p97, also known as valosin-containing protein (VCP), processes ubiquitinated substrates and plays a central role in cellular protein homeostasis . Mutations in human p97 are associated with multisystem proteinopathy (MSP), a dominantly inherited degenerative disorder that can affect muscle, bone and the central nervous system . It is also a drug target for cancer therapy with various inhibitors developed over the past decade . Despite significant structural insights into the fungal homologue of p97, Cdc48, little is known about how human p97 processes its substrates and how the activity is allosterically affected by inhibitors . Here, we report a series of cryo-electron microscopy (cryo-EM) structures of substrate-engaged human p97 complex with resolutions ranging from 2.9 to 3.8 Å that captured “ power stroke ” -like motions of both the D1 and D2 ATPase rings of p97 . The structures elucidated how the unfolded substrate is engaged in the pore at atomic level . Critical conformational changes of the inter-subunit signaling (ISS) motifs were revealed, providing molecular insights into substrate translocation . Furthermore, we also determined cryo-EM structures of human p97 in complex with NMS-873, the most potent p97 inhibitor, at a resolution of 2.4 Å . The structures showed that NMS-873 binds at a cryptic groove in the D2 domain and interacts with the ISS motif, preventing its conformational change, thus blocking substrate translocation allosterically . Finally, using NMS-873 at a substoichiometric concentration, we captured a series of intermediate states, suggesting how the cofactor Npl4 coordinates with the D1 ring of p97 to initiate the translocation.