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The main protease (M pro ) of SARS-CoV-2 is a well-characterized target for antiviral drug discovery. To date, most antiviral drug discovery efforts have focused on the S4-S1' pocket of M pro ; however, it is still unclear whether the S1'-S3' pocket per se can serve as a new site for drug discovery. In this study, the S1'-S3' pocket of M pro was found to differentially recognize viral peptidyl substrates. For instance, S3' in M pro strongly favors Phe or Trp, and S1' favors Ala. The peptidyl inhibitor D-4-77, which possesses an α-bromoacetamide warhead, was discovered to be a promising inhibitor of M pro , with an IC 50 of 0.95 μM and an antiviral EC 50 of 0.49 μM. The M pro /inhibitor co-crystal structure confirmed the binding mode of the inhibitor to the S1'-S3' pocket and revealed a covalent mechanism. In addition, D-4-77 functions as an immune protectant and suppresses SARS-CoV-2 M pro -induced antagonism of the host NF-κB innate immune response. These findings indicate that the S1'-S3' pocket of SARS-CoV-2 M pro is druggable, and that inhibiting SARS-CoV-2 M pro can simultaneously protect human innate immunity and inhibit virion assembly., (© 2023 Wiley-VCH GmbH.)