Alzheimer's disease (AD) pathogenesis has been linked to the accumulation of longer, aggregation-prone amyloid b (Ab) peptides in the brain. Γ-secretases generate Ab peptides from the amyloid precursor protein (APP). Γ-secretase modulators (GSMs) promote the generation of shorter, less-amyloidogenic Abs and have therapeutic potential. However, poorly defined drug-target interactions and mechanisms of action have hampered their therapeutic development. Here, we investigate the interactions between the imidazole-based GSM and its target c-secretase-APP using experimental and in silico approaches. We map the GSM binding site to the enzyme-substrate interface, define a drug-binding mode that is consistent with functional and structural data, and provide molecular insights into the underlying mechanisms of action. In this respect, our analyses show that occupancy of a c-secretase (sub)pocket, mediating binding of the modulator's imidazole moiety, is sufficient to trigger allosteric rearrangements in c-secretase as well as stabilize enzyme-substrate interactions. Together, these findings may facilitate the rational design of new modulators of c-secretase with improved pharmacological properties.