We describe a quantum electromechanical system comprising a single quantum dot harmonically bound between two electrodes and facilitating a tunneling current between them. An example of such a system is a fullerene molecule between two metal electrodes [Park et al., Nature 407, 57 (2000)]. The description is based on a quantum master equation for the density operator of the electronic and vibrational degrees of freedom and thus incorporates the dynamics of both diagonal (population) and off diagonal (coherence) terms. We derive coupled equations of motion for the electron occupation number of the dot and the vibrational degrees of freedom, including damping of the vibration and thermo-mechanical noise. This dynamical description is related to observable features of the system including the stationary current as a function of bias voltage.