In a pan, combine water, butter, salt, and sugar. Bring to a boil over high heat.
Reduce heat and add flour gradually, stirring until a smooth dough forms. Remove from heat.
Transfer dough to a bowl and let it cool for 4–5 minutes.
Add egg and vanilla, then mix until smooth using a hand mixer.
Transfer dough to a piping bag.
Preheat air fryer to 375°F (190°C). Lightly grease the basket.
Pipe bite-sized pieces into the basket without overcrowding.
Brush with butter and cook for 10–12 minutes until golden brown.
Mix cinnamon and sugar in a bowl. Toss warm churros in the mixture until coated.