The emergence ofmulti-drug resistant bacteria is limiting the effectiveness of commonly used antibiotics, which spurs a renewed interest in revisiting older and poorly studied drugs. Streptogramins A is a class of protein synthesis inhibitors that target the peptidyl transferase center (PTC) on the large subunit of the ribosome. In this work, we have revealed the mode of action of the PTC inhibitor madumycin II, an alanine-containing streptogramin A antibiotic, in the context of a functional 70S ribosome containing tRNA substrates. Madumycin II inhibits the ribosome prior to the first cycle of peptide bond formation. It allows binding of the tRNAs to the ribosomal A and P sites, but prevents correct positioning of their CCA-ends into the PTC thus making peptide bond formation impossible. We also revealed a previously unseen drug-induced rearrangement of nucleotides U2506 and U2585 of the 23S rRNA resulting in the formation of the U2506·G2583 wobble pair that was attributed to a catalytically inactive state of the PTC. The structural and biochemical data reported here expand our knowledge on the fundamental mechanisms by which peptidyl transferase inhibitors modulate the catalytic activity of the ribosome.