Chronic pain is a significant global health, economic and social problem. Currently used analgesics provide adequate pain relief in only a small proportion of chronic pain patients. Recent studies have revealed that glycinergic transmission in the spinal cord is diminished in neuropathic pain states and is an important CNS mechanism underlying mechanical hyperalgesia and allodynia. Two subtypes of glycine transporters, GlyT1 and GlyT2, work to regulate extracellular glycine concentrations. GlyT1 is expressed throughout the CNS, while GlyT2 shows much more restricted expression patterns and is predominantly expressed by glycinergic terminals in the spinal cord and brain stem. Drugs that can enhance dysfunctional glycinergic transmission in neuropathic pain, and in particular GlyT2 inhibitors, are widely recognised as potential chronic pain therapeutics. Our group has identified a series of bioactive lipids that inhibit the glycine transporter GlyT2. The most potent of the compounds are Oleoyl-L-Carnitine (OLCarn), N-Oleoyl-Glycine (NOGly) and N-Arachidonyl-Glycine (NAGly). All three lipids are mixed inhibitors. The aim of this study was to investigate the mechanism of lipid inhibition of GlyTs. Homology models of the GlyTs were constructed and employed to drive site-directed mutagenesis studies. Mutant transporters were expressed in Xenopus laevis oocytes and activity was monitored using two-electrode voltage clamp. We have identified mutations in four distinct regions of the protein that influence lipid potency and efficacy; extracellular loop 4 (EL4), transmembrane domains 7 and 8, and the substrate binding site (S1). Our findings suggest that our lipid inhibitors work via an allosteric mechanism. This work not only has the potential to develop a new class of GlyT2 inhibitors, but also enhances our understanding of the function of GlyTs and related transporters.