Human diphtheria toxin-like ADP-ribosyltransferases, PARPs and tankyrases, transfer ADP-ribosyl groups to other macromolecules, thereby controlling various signaling events in cells. They are considered promising drug targets, especially in oncology, and a vast number of inhibitors have already been successfully developed. These inhibitors typically occupy the nicotinamide binding site and extend along the NAD+ binding groove of the catalytic domain. Quinazolin-4-ones have been explored as compelling scaffolds for such inhibitors and we have identified a new position within the catalytic domain that has not been extensively studied yet. In this study, we investigate larger substituents at the C-8 position and, using X-ray crystallography, we demonstrate that nitro- and diol-substituents engage in new interactions with TNKS2, improving both affinity and selectivity. Both diol- and nitro-substituents exhibit intriguing inhibition of TNKS2, with the diol-based compound EXQ-1e displaying a pIC50 of 7.19, while the nitro-based compound EXQ-2d's pIC50 value is 7.86. Both analogues impact and attenuate the tankyrase-controlled WNT/β-catenin signaling with sub-micromolar IC50. When tested against a wider panel of enzymes, the nitro-based compound EXQ-2d displayed high selectivity towards tankyrases, whereas the diol-based compound EXQ-1e also inhibited other PARPs. Compound EXQ-2d displays in vitro cell growth inhibition of the colon cancer cell line COLO 320DM, while compound EXQ-1e displays nonspecific cell toxicity. Collectively, the results offer new insights for inhibitor development targeting tankyrases and PARPs by focusing on the subsite between a mobile active site loop and the canonical nicotinamide binding site.