Pneumolysin (PLY), a major virulence factor of , perforates cholesterol-rich lipid membranes. PLY protomers oligomerize as rings on the membrane and then undergo a structural transition that triggers the formation of membrane pores. Structures of PLY rings in prepore and pore conformations define the beginning and end of this transition, but the detailed mechanism of pore formation remains unclear. With atomistic and coarse-grained molecular dynamics simulations, we resolve key steps during PLY pore formation. Our simulations confirm critical PLY membrane-binding sites identified previously by mutagenesis. The transmembrane β-hairpins of the PLY pore conformation are stable only for oligomers, forming a curtain-like membrane-spanning β-sheet. Its hydrophilic inner face draws water into the protein-lipid interface, forcing lipids to recede. For PLY rings, this zone of lipid clearance expands into a cylindrical membrane pore. The lipid plug caught inside the PLY ring can escape by lipid efflux via the lower leaflet. If this path is too slow or blocked, the pore opens by membrane buckling, driven by the line tension acting on the detached rim of the lipid plug. Interestingly, PLY rings are just wide enough for the plug to buckle spontaneously in mammalian membranes. In a survey of electron cryo-microscopy (cryo-EM) and atomic force microscopy images, we identify key intermediates along both the efflux and buckling pathways to pore formation, as seen in the simulations.