β-amyloid cleaving enzyme 1 (BACE1) is the principal target of drug design towards the remedy of Alzheimer’s disease. A recent report outlines that amidine based oxazine derivative compound (C1) strongly halt the activity of BACE1. Though, detail at the atomic level of C1 binding mechanism towards BACE1 is unknown. Therefore, docking, molecular dynamics (MD) simulations and binding free energy (MM−PBSA) of apo−BACE1 and BACE1–C1 were performed to shed light on the binding mechanism of C1 against activity of BACE1. The MD simulations result indicates that C1 exhibits a strong interaction with Asp protease (Asp32 and Asp228) and dynamic subpockets of BACE1. The hydrogen−bonding and hydrophobic interactions of C1 towards flap (Val67−Glu77) of BACE1 limit the flap motion thereby achieved a close (inactive) position. The mean distance (d 1) of flap tip residues (Thr72 and Ser325) of apo−BACE1 (~1.3 nm) showed more flexibility and open conformation whereas BACE1−C1 adapted a close conformation with decrease in average distance d 1 (~1.1 nm) during the simulation. The slight twisting (curl) observed in apo−BACE1 with dihedral angle ( ϕ) value (−47.33°) as compare to BACE1−C1 (−39.83°) which shows more flexibility between flap tip residues with Asp protease in apo−BACE1. The values of θ 1 (Thr72−Asp32−Ser325) has ∼43.15° where θ 2 (Thr72−Asp228−Ser325) has ∼61.61° quite higher in apo−BACE1 highlights the opening of the flap in contrast to BACE1−C1 having low θ 1 and θ 2 values (∼33.6° and ∼51.48°) showed flap is in closed position. MM−PBSA results highlights that C1 binds to BACE1 with suitable binding free energy (Δ G binding= –51.5 ± 4.4 kcal/mol) and per-residue binding free energy showed that Asp protease, 10s loop residue Gln12, active subpockets (S1, S3- S4 and S1´-S3′) and flap (Pro70, Tyr71, Thr72, Gln73) of BACE1 play a significant role in the binding of C1 to BACE1. The findings of this study provide inhibitory mechanism of C1 to block BACE1 activity which in future will aid the development of new BACE1 inhibitors with greater efficacy.