AbstractCD38 is a multi‐functional signaling enzyme that catalyzes the biosynthesis of two calcium‐mobilizing second messengers: cyclic ADP‐ribose and nicotinic acid adenine dinucleotide phosphate. It also regulates intracellular nicotinamide adenine dinucleotide (NAD) contents, associated with multiple pathophysiological processes such as aging and cancer. As such, enzymatic inhibitors of CD38 offer great potential in drug development. Here, through virtual screening and enzymatic assays, we discovered compound LX‐102, which targets CD38 on the side opposite its enzymatic pocket with a binding affinity of 7.7 μm. It inhibits the NADase activity of CD38 with an IC50 of 14.9 μm. Surface plasmon resonance (SPR) and hydrogen/deuterium exchange and mass spectrometry experiments verified that LX‐102 competitively binds to the epitope of the therapeutic SAR 650984 antibody in an allosteric manner. Molecular dynamics simulation was performed to demonstrate the binding dynamics of CD38 with the allosteric ligand. In summary, we established that the cavity to which SAR 650984 binds was an allosteric site and was accessible for the rational design of small chemical modulators of CD38. The lead compound LX‐102 that we identified in this study could also be a useful tool for probing CD38 functions and promoting drug discovery.