<p>Positional vertigo and nystagmus may occur when inputs from the semicircular canals and otolithic organs are mismatched, and when this mismatch originates from central dysfunction it is called central positional vertigo and nystagmus (CPVN). Therefore, the velocity-storage (VS) circuit, which computes composite estimates of rotational velocity, gravity orientation, and inertial acceleration from peripheral vestibular signals, underlies the generation of CPVN. In this review, we begin by detailing the VS circuit via a deterministic model that demonstrates how it estimates rotational velocity, gravity orientation, and inertial acceleration. Given the hierarchical and reciprocal information processing within the VS circuit, an error at any stage can propagate and cause subsequent errors. For example, a false rotational estimate can cascade into other estimates, such as gravity orientation and inertial acceleration. Hence, the VS model provides a unified framework for explaining CPVN resulting from central lesions. We then synthesize clinical observations of CPVN to date, classifying them into two temporal forms—paroxysmal and persistent—and provide mechanistic explanations: paroxysmal CPVN is driven by exaggerated post-rotatory rebound, whereas persistent CPVN results from a head-fixed gravity bias. These mechanisms are corroborated by deterministic VS model simulations, in which mechanism-based lesions within the VS circuit faithfully reproduce the paroxysmal and persistent CPVN features observed in patients. Furthermore, by extending the VS model, we show how an adaptive loop in the VS integrator accounts for the positional modulation of periodic alternating nystagmus, and how a conditional (orientation-dependent) error in gravity estimation explains the recently described periodic downbeat nystagmus in the supine position. By capturing the broad clinical spectrum of CPVN and reproducing it with the VS circuit model, we provide key insights for accurately diagnosing central dysfunction in positional vertigo and nystagmus and present a comprehensive pathophysiological framework for CPVN.</p>