Alzheimer’s disease (AD) is a progressive neurodegenerative disorder that is characterized by loss of intellectual functioning of brain and memory loss. According to amyloid cascade hypothesis, aggregation of amyloid-β42 (Aβ42) peptide can generate toxic oligomers and their accumulation in the brain is responsible for the onset of AD. In spite of carrying out a large number of experimental studies on inhibition of Aβ42 aggregation by small molecules, the detailed inhibitory mechanism remains elusive. In the present study, comparable molecular dynamics (MD) simulations were performed to elucidate the inhibitory mechanism of a sulfonamide inhibitor C1 (2,5-dichloro-N-(4-piperidinophenyl)-3-thiophenesulfonamide), reported for its in vitro and in vivo anti-aggregation activity against Aβ42. MD simulations reveal that C1 stabilizes native α-helix conformation of Aβ42 by interacting with key residues in the central helix region (13–26) with hydrogen bonds and π–π interactions. C1 lowers the solvent-accessible surface area of the central hydrophobic core (CHC), KLVFF (16–20), that confirms burial of hydrophobic residues leading to the dominance of helical conformation in the CHC region. The binding free energy analysis with MM–PBSA demonstrates that Ala2, Phe4, Tyr10, Gln15, Lys16, Leu17, Val18, Phe19, Phe20, Glu22, and Met35 contribute maximum to binding free energy (−43.1 kcal/mol) between C1 and Aβ42 monomer. Overall, MD simulations reveal that C1 inhibits Aβ42 aggregation by stabilizing native helical conformation and inhibiting the formation of aggregation-prone β-sheet conformation. The present results will shed light on the underlying inhibitory mechanism of small molecules that show potential in vitro anti-aggregation activity against Aβ42.