Heterotrimeric GTP-binding proteins (G proteins) transmit extracellular stimuli perceived by G protein-coupled receptors (GPCRs) to intracellular signaling cascades. Hundreds of GPCRs exist in humans and are the targets of a large percentage of the pharmaceutical drugs used today. Because G proteins are regulated by GPCRs, small molecules that directly modulate G proteins have the potential to become therapeutic agents. However, strategies to develop modulators have been hampered by a lack of structural knowledge of targeting sites for specific modulator binding. Here we present the mechanism of action of the cyclic depsipeptide YM-254890, which is a recently discovered Gq-selective inhibitor. YM-254890 specifically inhibits the GDP/GTP exchange reaction of alpha subunit of Gq protein (Galphaq) by inhibiting the GDP release from Galphaq. X-ray crystal structure analysis of the Galphaqbetagamma-YM-254890 complex shows that YM-254890 binds the hydrophobic cleft between two interdomain linkers connecting the GTPase and helical domains of the Galphaq. The binding stabilizes an inactive GDP-bound form through direct interactions with switch I and impairs the linker flexibility. Our studies provide a novel targeting site for the development of small molecules that selectively inhibit each Galpha subunit and an insight into the molecular mechanism of G protein activation.