The voltage-gated potassium ion channel Kv1.3 is an attractive therapeutic target due to its central role in effector memory T cell activation and autoimmune disease. Achieving subtype-selective inhibition remains challenging due to the high sequence conservation across the Kv1 family and the lack of structural insight into binding for selective small molecule inhibitors. Here, using a ligand-based virtual screening approach seeded from an existing dichlorophenol scaffold, we identify a novel indole-based chemotype as a highly selective small molecule inhibitor of human Kv1.3. Through a combination of site-directed mutagenesis and cryoEM, we map the binding site and elucidate the inhibitory mechanism of both chemotypes. We show that dichlorophenol and indole inhibitors bind to a cryptic pocket in the P-loop adjacent to the selectivity filter, with four ligands occupying this site per Kv1.3 tetramer. Inhibitor binding induces an expansion of the selectivity filter, disrupts key hydrogen bonds, and stabilizes a channel conformation resembling the C-type inactivated state. This inhibitory mechanism is distinct from a pore block and accesses a site previously restricted to peptide-based inhibitors. This study provides the first atomic-level view of small molecule engagement to Kv1.3 and expanding the mechanistic repertoire of voltage-gated ion channel inhibition. Together, our findings enable future comparison of state-dependent inhibition and downstream effector function while establishing a structural framework for the rational development of selective small molecule voltage-gated ion channel therapeutics.