We report the design and synthesis of a 1D Dy(iii) coordination polymer, comprised of sulfonate functionalised ligand 8-hydroxyquinoline-5-sulfonic acid (H2SQ) and Dy3+ ions, with a hydrogen-bonded supramolecular 3D structure. Interestingly, the coordination compound can exhibit reversible structural transformation from a trihydrate (1·3H2O) to a monohydrate (1·H2O) phase during partial desorption/adsorption processes of water molecules in a single-crystal-to-single-crystal (SC-SC) fashion. Importantly, the field-induced slow magnetic relaxation behaviour and proton conduction performance were both switched during the dynamic structural transformation, giving rise to a proton conductive SIM of 1·3H2O and a SIM-insulator of 1·H2O. Variable temperature single-crystal structural analyses reveal that the non-coordinated water molecules play a vital role in the changes in primary coordination environments around the Dy3+ ions, and the global hydrogen-bonding networks, resulting in the modification of magnetic properties and proton transport pathways in 1·3H2O and 1·H2O, respectively. The previous results not only provide the first example of a Dy(iii) sulfonate showing switched single-ion magnetism and proton conduction behaviour but also highlight a promising way to use water for dynamic control of magnetic and electrical properties. © 2022 The Royal Society of Chemistry.