Abstract Allosteric modulation of G protein-coupled receptors (GPCRs) is a major paradigm in drug discovery. Despite decades of research, a molecular level understanding of the general principals that govern the myriad pharmacological effects exerted by GPCR allosteric modulators remains limited. The M 4 muscarinic acetylcholine receptor (M 4 mAChR) is a well-validated and clinically relevant allosteric drug target for several major psychiatric and cognitive disorders. Here, we present high-resolution cryo-electron microscopy structures of the M 4 mAChR bound to a cognate G i1 protein and the high affinity agonist, iperoxo, in the absence and presence of two different positive allosteric modulators, LY2033298 or VU0467154. We have also determined the structure of the M 4 mAChR-G i1 complex bound to its endogenous agonist, acetylcholine (ACh). Structural comparisons, together with molecular dynamics, mutagenesis, and pharmacological validations, have provided in-depth insights into the role of structure and dynamics in orthosteric and allosteric ligand binding, global mechanisms of receptor activation, cooperativity, probe-dependence, and species variability; all key hallmarks underpinning contemporary GPCR drug discovery.