Human neuropeptide Y receptors (Y1R, Y2R, Y4R, and Y5R) belong to the superfamily of G protein-coupled receptors and play an important role in the regulation of food intake and energy metabolism. We identified and characterized the first selective Y4R allosteric antagonist (S)-VU0637120, an important step toward validating Y receptors as therapeutic targets for metabolic diseases. To obtain insight into the antagonistic mechanism of (S)-VU0637120, we conducted a variety of in vitro, ex vivo, and in silico studies. These studies revealed that (S)-VU0637120 selectively inhibits native Y4R function and binds in an allosteric site located below the binding pocket of the endogenous ligand pancreatic polypeptide in the core of the Y4R transmembrane domains. Taken together, our studies provide a first-of-its-kind tool for probing Y4R function and improve the general understanding of allosteric modulation, ultimately contributing to the rational development of allosteric modulators for peptide-activated G protein-coupled receptors (GPCRs).