Voltage-gated K+ channels play central roles in human physiology, both in health and disease. A repertoire of inhibitors that are both potent and specific would therefore be of great value, not only as pharmacological agents but also as research tools. The small molecule RY785 has been described as particularly promising in this regard, as it selectively inhibits channels in the Kv2 subfamily with high potency. Kv2 channels are expressed in multiple cell types in humans, and are of particular importance for neuronal function. The mechanism of action of RY785 has not yet been determined at the molecular level, but functional studies indicate it differs from that of less specific inhibitors, such as quaternary-ammonium compounds or aminopyridines; RY785 is distinct also in that it is electroneutral. To examine this mechanism at the single-molecule level, we have carried out a series of all-atom molecular dynamics simulations based on the experimental structure of the Kv2.1 channel in the activated, open state. First, we report a 25-microsecond trajectory calculated in the absence of any inhibitor, under an applied voltage of 100 mV, which demonstrates outward K+ flow under simulation conditions at rates comparable to experimental measurements. Additional simulations in which either RY785 or tetraethylammonium (TEA) is introduced in solution show both inhibitors spontaneously enter the channel through the cytoplasmic gate, with distinct effects. In agreement with prior structural studies, we observe that TEA binds to a site adjacent to the selectivity filter, on the pore axis, thereby blocking the flow of K+ ions. RY785, by contrast, binds to the channel walls, off-axis, and allows K+ flow while the cytoplasmic gate remains open. The observed mode of RY785 binding, however, indicates that its mechanism of action is to stabilize and occlude a semi-open state of the gate, by bridging hydrophobic protein-protein interactions therein; this hypothesis would explain the puzzling experimental observation that RY785 recognition influences the gating currents generated by the voltage sensors, 3 nm away.