The KCR channelrhodopsins are recently-discovered light-gated ion channels with high K+selectivity, a property that has attracted broad attention among biologists – due to intense interest in creating novel inhibitory tools for optogenetics leveraging this K+selectivity, and due to the mystery of how this selectivity is achieved in the first place. Indeed, the molecular and structural mechanism for K+selectivity in KCRs has remained especially puzzling since these 7-transmembrane retinal-binding proteins completely lack structural similarity with known K+channels, which generally coordinate K+in a precisely symmetric conduction pathway formed by a tight interface among multiple small monomeric channel subunits (presumably not an accessible mechanism for the large KCR rhodopsin proteins). Here we present the cryo-electron microscopy structures of two KCRs from Hyphochytrium catenoides with distinct spectral properties for light absorption and channel actuation, HcKCR1, and HcKCR2, at resolutions of 2.6 and 2.5 Å, respectively. Structural comparison revealed first an unusually-shaped retinal binding pocket which induces rotation of the retinal in HcKCR2, explaining the large spectral difference between HcKCR1 and 2. Next, our combined structural, electrophysiological, computational, and spectroscopic analyses revealed a new solution to the challenging problem of K+-selective transport. KCRs indeed do not exhibit the canonical tetrameric K+selectivity filter that specifically coordinates dehydrated K+; instead, single KCR monomers form a size exclusion filter using aromatic residues at the extracellular side of the pore which inhibits passage of bulky hydrated ions. This unique feature allows KCRs to function as K+channels under relevant physiological conditions, providing not only a novel mechanism for achieving high K+permeability ratios in biological ion channels, but also a framework for designing the next generation of inhibitory optogenetic tools.