Human GPR40 receptor (hGPR40), also known as free fatty-acid receptor 1 (FFAR1), is a G-protein-coupled receptor that binds long-chain free fatty acids to enhance glucose-dependent insulin secretion. Novel treatments for type-2 diabetes mellitus are therefore possible by targeting hGPR40 with partial or full agonists. TAK-875, or fasiglifam, is an orally available, potent and selecive partial agonist of hGPR40 receptor, which reached phase III clinical trials for the potential treatment of type-2 diabetes mellitus. Data from clinical studies indicate that TAK-875, which is an ago-allosteric modulator of hGPR40 (ref. 3), demonstrates improved glycaemic control and low hypoglycaemic risk in diabetic patients. Here we report the crystal structure of hGPR40 receptor bound to TAK-875 at 2.3 Å resolution. The co-complex structure reveals a unique binding mode of TAK-875 and suggests that entry to the non-canonical binding pocket most probably occurs via the lipid bilayer. The atomic details of the extensive charge network in the ligand binding pocket reveal additional interactions not identified in previous studies and contribute to a clear understanding of TAK-875 binding to the receptor. The hGPR40–TAK-875 structure also provides insights into the plausible binding of multiple ligands to the receptor, which has been observed in radioligand binding and Ca2+ influx assay studies. Comparison of the transmembrane helix architecture with other G-protein-coupled receptors suggests that the crystallized TAK-875-bound hGPR40 complex is in an inactive-like state.