Firefly luciferase (FLuc), an ATP-dependent bioluminescent reporter enzyme, is broadly used in chemical biology and drug discovery assays. PTC124 (Ataluren; (3-[5-(2-fluorophenyl)-1,2,4-oxadiazol-3-yl]benzoic acid) discovered in an FLuc-based assay targeting nonsense codon suppression, is an unusually potent FLuc-inhibitor. Paradoxically, PTC124 and related analogs increase cellular FLuc activity levels by posttranslational stabilization. In this study, we show that FLuc inhibition and stabilization is the result of an inhibitory product formed during the FLuc-catalyzed reaction between its natural substrate, ATP, and PTC124. A 2.0 Å cocrystal structure revealed the inhibitor to be the acyl-AMP mixed-anhydride adduct PTC124-AMP, which was subsequently synthesized and shown to be a high-affinity multisubstrate adduct inhibitor (MAI; KD = 120 pM) of FLuc. Biochemical assays, liquid chromatography/mass spectrometry, and near-attack conformer modeling demonstrate that formation of this novel MAI is absolutely dependent upon the precise positioning and reactivity of a key meta-carboxylate of PTC124 within the FLuc active site. We also demonstrate that the inhibitory activity of PTC124-AMP is relieved by free coenzyme A, a component present at high concentrations in luciferase detection reagents used for cell-based assays. This explains why PTC124 can appear to increase, instead of inhibit, FLuc activity in cell-based reporter gene assays. To our knowledge, this is an unusual example in which the "off-target" effect of a small molecule is mediated by an MAI mechanism.