Olfactory receptors are members of class A (rhodopsin-like) family of G protein-coupled receptors (GPCRs). Their expression and function have been increasingly studied in nonolfactory tissues, and many have been identified as potential therapeutic targets. In this manuscript, we focus on the discovery of novel ligands for the olfactory receptor family 51 subfamily E2 (OR51E2). We performed an artificial intelligence-based virtual drug screen of a ∼2.2 million small molecule library. Cell-based functional assay identified compound 80 (C80) as an antagonist and inverse agonist, and detailed pharmacological analysis revealed C80 acts as a negative allosteric modulator by significantly decreasing the agonist efficacy, while having a minimal effect on receptor affinity for agonist. C80 binds to an allosteric binding site formed by a network of nine residues localized in the intracellular parts of transmembrane domains 3, 5, 6, 7, and H8, which also partially overlaps with a G protein binding site. Mutational experiments of residues involved in C80 binding uncovered the significance of the C2406.37 position in blocking the activation-related conformational change and keeping the receptor in the inactive form. Our study provides a mechanistic understanding of the negative allosteric action of C80 on agonist-ctivated OR51E2. We believe the identification of the antagonist of OR51E2 will enable a multitude of studies aiming to determine the functional role of this receptor in specific biologic processes. SIGNIFICANCE STATEMENT: OR51E2 has been implicated in various biological processes, and its antagonists that can effectively modulate its activity have therapeutic potential. Here we report the discovery of a negative allosteric modulator of OR51E2 and provide a mechanistic understanding of its action. We demonstrate that this modulator has an inhibitory effect on the efficacy of the agonist for the receptor and reveal a network of nine residues that constitute its binding pocket, which also partially overlaps with the G protein binding site.