The β-site amyloid precursor protein-cleaving enzyme 1 (β-secretase, BACE1) is a prominent drug target amongst all other targets of Alzheimer's disease (AD) as it is involved in the rate-determining step of amyloid-β (Aβ) production. Fan et al. identified 2-amino-imidazol-4-one derivative L5 as a potent inhibitor of BACE1 (IC50=0.12 μM, logP=2.49). However, it remains unclear how L5 inhibits the BACE1 activity. In this work, atomistic molecular dynamics (MD) simulations have been carried out to explore the interaction mechanism of L5 with BACE1. The molecular docking analysis highlighted strong binding (−9.1 kcal/mol) of L5 with the active site residues of BACE1. MD simulations revealed hydrogen bonds and hydrophobic contacts of L5 with the BACE1 active pocket residues control the dynamics of the flap and assist to attain the closed (non-active) conformation. The binding free energy analysis depicted strong interaction of L5 with BACE1 (▵Gbinding=−34.6±3.6 kcal/mol) and highlighted the significant contribution of the active pockets, aspartic dyad, and flap residues of BACE1 in the binding with L5. The free energy landscape (FEL) analysis highlighted a close flap conformation in the lowest energy conformation of BACE1-L5 complex as compared to open flap (active) conformation in apo-BACE1. The study reveals the interaction mechanism of L5 with BACE1, which will be helpful for the structure-based design of potent inhibitors against BACE1.