We have previously identified a novel class of 5-hydroxytryptamine type 3 receptor (5-HT3R) agonists sharing little structural similarity with orthosteric 5-HT3R ligands (Jørgensen et al., 2011). In the present study we have elucidated the functional characteristics and the mechanism of action of one of these compounds, trans-3-(4-methoxyphenyl)-N-(pentan-3-yl)acrylamide (TMPPAA). In electrophysiological recordings TMPPAA was found to be a highly-efficacious partial agonist equipotent with 5-HT at the 5-HT3A receptor (5-HT3AR) expressed in COS-7 cells and somewhat less potent at the receptor expressed in Xenopus oocytes. The desensitization kinetics of TMPPAA-evoked currents were very different from those mediated by 5-HT. Moreover, repeated TMPPAA applications resulted in progressive current run-down and persistent non-responsiveness of the receptor to TMPPAA, but not to 5-HT. In addition to its direct activation, TMPPAA potentiated 5-HT-mediated 5-HT3AR signalling, and the allosteric link between the two binding sites was corroborated by the analogous ability of 5-HT to potentiate TMPPAA-evoked responses. The agonism and potentiation exerted by TMPPAA at a chimeric α7-nACh/5-HT3A receptor suggested that the ligand acts through the transmembrane domain of 5-HT3AR, a notion further substantiated by its functional properties at chimeric and mutant human/murine 5-HT3ARs. A residue in the transmembrane helix 4 of 5-HT3A was identified as an important molecular determinant for the different agonist potencies exhibited by TMPPAA at human and murine 5-HT3ARs. In conclusion, TMPPAA is a novel allosteric agonist and positive allosteric modulator of 5-HT3Rs, and its aberrant signalling characteristics compared to 5-HT at the 5-HT3AR underline the potential in Cys-loop receptor modulation and activation through allosteric sites.