ABSTRACT The COVID-19 pandemic, caused by the novel severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), has caused profound socioeconomic challenges for humankind. Antiviral agents blocking SARS-CoV-2 viral replication that complement vaccination are urgently needed to stop the current pandemic and to avoid potential future outbreaks. The papain-like protease (PLpro), an essential cysteine protease that regulates viral replication and host immune sensing, is a promising antiviral target against SARS-CoV-2. However, the rapid development of potent PLpro inhibitors has been hindered by limited draggable interactions at the active site due to restricted P1 and P2 sites with glycine recognition. To address these challenges, we have investigated novel, druggable binding sites, distal to the active site, using structure-guided design and X-ray crystallography. These efforts led to a series of 2-phenylthiophene-based inhibitors with low nanomolar potency. Crystal structures revealed that these potent SARS-CoV-2 PLpro inhibitors engage with a novel ligand-binding site, the “BL2 groove”, leading to slower off-rates, improved binding affinities, and low micromolar antiviral potency in SARS-CoV-2-infected human cells. Moreover, these inhibitors showed good microsomal stability and in vivo exposure after intraperitoneal (IP) administration. Building on these encouraging preliminary data, we propose in this project to further optimize and develop these novel PLpro inhibitors to achieve in vivo antiviral efficacy. We propose: Aim 1) to optimize our lead PLpro inhibitors for improved potency and drug- likeness properties using structure-guided design; Aim 2) to evaluate and triage PLpro inhibitors based on biochemical, ADME, and antiviral assays; Aim 3) to assess the PK/PD profile of top inhibitors and to establish in vivo antiviral efficacy. Completion of the research will lead to small molecules suitable for development as drug candidates to treat SARS-CoV-2.