The nuclear protein poly (ADP-ribose) polymerase-1 (PARP-1) inhibitors have been proven effective to potentiate both chemotherapeutic agents and radiotherapy. However, a major problem of most current PARP inhibitors is their lack of selectivity for PARP-1 and its closest isoform PARP-2. NMS-P118 is a highly selective PARP inhibitor that binds PARP-1 stronger than PARP-2 and has many advantages such as excellent pharmacokinetic profiles. In this study, molecular dynamics (MD) simulations of NMS-P118 in complex with PARP-1 and PARP-2 were performed to understand the molecular mechanism of its selectivity. Alanine scanning together with free energy calculation using MM/GBSA and interaction entropy reveal key residues that are responsible for the selectivity. Although the conformation of the binding pockets and NMS-P118 are very similar in PARP-1 and PARP-2, most of the hot-spot residues in PARP-1 have stronger binding free energy than the corresponding residues in PARP-2. Detailed analysis of the binding energy shows that the 4′4-difluorocyclohexyl ring on NMS-P118 form favorable hydrophobic interaction with Y889 in PARP-1. In addition, the H862 residue in PARP-1 has stronger binding free energy than H428 in PARP-2, which is due to shorter distance and stronger hydrogen bonds. Moreover, the negatively charged E763 residue in PARP-1 forms stronger electrostatic interaction energy with the positively charged NMS-P118 than the Q332 residue in PARP-2. These results rationalize the selectivity of NMS-P118 and may be useful for designing novel selective PARP inhibitors.