TMEM16A, a calcium-activated chloride channel involved in multiple cellular processes, is a proposed target for diseases such as hypertension, asthma, and cystic fibrosis. Despite these therapeutic promises, its pharmacology remains poorly understood. Here, we present a cryo-EM structure of TMEM16A in complex with the channel blocker 1PBC and a detailed functional analysis of its inhibition mechanism. A pocket located external to the neck region of the hourglass-shaped pore is responsible for open-channel block by 1PBC and presumably also by its structural analogs. The binding of the blocker stabilizes an open-like conformation of the channel that involves a rearrangement of several pore helices. The expansion of the outer pore enhances blocker sensitivity and enables 1PBC to bind at a site within the transmembrane electric field. Our results define the mechanism of inhibition and gating and will facilitate the design of new, potent TMEM16A modulators.