The paenilamicins are a group of hybrid non-ribosomal peptide-polyketide compounds produced by the honey bee pathogen Paenibacillus larvae that display activity against Gram-positive pathogens, such as Staphylococcus aureus. While paenilamicins have been shown to inhibit protein synthesis, their mechanism of action has remained unclear. Here, we have determined structures of the paenilamicin PamB2 stalled ribosomes, revealing a unique binding site on the small 30S subunit located between the A- and P-site tRNAs. In addition to providing a precise description of interactions of PamB2 with the ribosome, the structures also rationalize the resistance mechanisms utilized by P. larvae. We could further demonstrate that PamB2 interferes with the translocation of mRNA and tRNAs through the ribosome during translation elongation, and that this inhibitory activity is influenced by the presence of modifications at position 37 of the A-site tRNA. Collectively, our study defines the paenilamicins as a new class of context-specific translocation inhibitors.