β-amyloid precursor protein cleaving enzyme1 (BACE1) has prominently been an important drug design target implicated in Alzheimer's disease pathway. The failure rate of most of the already tested drugs at different clinical phases remains a major concern. Recently, AM-6494 was reported as a novel potent, highly selective, and orally effective inhibitor against BACE1. AM-6494 displayed no alteration of skin/fur colour in animal studies, an adverse effect common to previous BACE1 inhibitors. However, the atomistic molecular mechanism of BACE1 inhibition by AM-6494 remains unclear. To elucidate the binding mechanism of AM-6494 relative to umibecestat (CNP-520) as well as the structural changes when bound to BACE1, advanced computational techniques such as accelerated MD simulation and principal component analysis have been utilised. The results demonstrated higher binding affinity of AM-6494 at BACE1 with van der Waals as dominant energy contributor compared to umibecestat. Conformational monitoring of the β-hairpin flap covering the active site revealed an effective flap closure when bound with AM-6494 compared to CNP-520, which predominantly alternates between semi-open and closed conformations. The observed effective flap closure of AM-6494 explains its higher inhibitory power towards BACE1. Besides the catalytic Asp32/228 dyad, Tyr14, Leu30, Tyr71 and Gly230 represent critical residues in the potency of these inhibitors at BACE1 binding interface. The findings highlighted in this research provide a basis to explain AM-6494 high inhibitory potency and might assist in the design of new inhibitors with improved selectivity and potency for BACE1.