The M4 and M5 muscarinic acetylcholine receptors (mAChRs) have emerged as drug targets of high therapeutic interest due to their expression in brain regions involved in psychosis, cognition, and addiction. The promise of therapeutically targeting the M4 mAChR is exemplified by xanomeline which is currently undergoing Phase III clinical trials for treating patients with Schizophrenia. At the M5 mAChR, selective allosteric modulators (compounds that bind to a site distinct from the endogenous ligand binding site) have been discovered and these have shown promise in preclinical studies of drug addiction and anxiety. Despite the clinical utility of these compounds, the molecular mechanisms of how these compounds activate their receptor has remained elusive. For example, the binding site(s) for M5 mAChR selective modulators is unknown and has hindered the development of improved allosteric modulators. We determined a 1.9 Å resolution structure of the M5 mAChR with the selective allosteric modulator VU6007678 bound. Our structure reveals a novel allosteric binding site previously unknown at the mAChRs. At the M4 mAChR, we determined a 2.5 Å structure of the human M4 mAChR bound to xanomeline. Unexpectedly, two molecules of xanomeline were found to concomitantly bind to the M4 mAChR, with one molecule bound in the endogenous ligand binding site and a second molecule in an allosteric site. To our knowledge, this is the first time this has been observed for a clinically relevant small molecule at a GPCR. Molecular dynamic simulations support the structural findings, and pharmacological validation confirmed that xanomeline acts as a dual orthosteric and allosteric ligand at the M4 mAChR. Altogether this highlights the power of cryo-EM in revealing novel mechanisms through which drugs regulate receptors.