Despite the essential roles of Frizzled receptors (FZDs) in mediating Wnt signaling in embryonic development and tissue homeostasis, ligands targeting FZDs are rare. A few antibodies and peptide modulators have been developed that mainly bind to the family-conserved extracellular cysteine-rich domain of FZDs, while the canonical binding sites in the transmembrane domain (TMD) are far from sufficiently addressed. Based on the recent structures of FZDs, we explored small-molecule ligand discovery by targeting TMD. From the ChemDiv library with ∼1.6 million compounds, we identified compound F7H as an antagonist of FZD7 with an IC50 at 1.25 ± 0.38 μM. Focusing on this hit, the structural dissection study, together with computing studies such as molecular docking, molecular dynamics simulation, and free energy perturbation calculations, defined the binding pocket with key residue recognition. Our results revealed the structural basis of ligand recognition and demonstrated the feasibility of structure-guided ligand discovery for FZD7-TMD.