CONTEXT: A steroidal alkaloid, 4-acetoxy-plakinamine B (4APB), is a recently discovered marine natural product with inhibitory effect against acetylcholinesterase (AChE), but its mechanism of interaction with the enzyme remains to be elucidated. OBJECTIVE: The main objective was to study molecular binding mode of the compound, its interactions with catalytic subsites and molecular mechanism behind its significant inhibitory effect. MATERIALS AND METHODS: All possible interactions of ligands in the binding sites were analyzed using FRED 2.1 and the OMEGA pre-generated multi-conformer library. RESULTS: Dipole-dipole interactions were observed between the secondary amino group of 4APB and Ser200 at a distance of 3.91 A and also with Gly117 and Gly118. A further dipole-dipole interaction was between Arg289 and the heterocyclic nitrogen. Hydrogen bonding interactions were observed between Tyr130 and secondary amino and C-4 acetyl groups as well as between heterocyclic nitrogen and Phe288 at a distance of 3.04 A. Hydrophobic interactions were evident between rings C/D of 4APB and with Phe288, Phe330 and Phe331. The computational studies revealed 4APB's critical molecular interaction with amino acids of peripheral active (PAS) and anionic (AS) subsites. DISCUSSION: Our data provided molecular evidence for the mixed competitive inhibitory effect of 4APB. For lead optimization, structural insights revealed the N-methyl group of 4APB could be replaced by NH2 moiety to generate a more favorable hydrogen bonding with Glu199. A polar group insertion such as NH2 or OH at certain sites of the 4APB skeleton is also recommended. CONCLUSION: These computational insights explained the mixed-competitive enzyme kinetic behavior of 4APB. This study outlines a strategy for designing novel derivatives of 4APB with potentially better AChE inhibitory activities through interaction at the PAS and AS sites.