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BLM (Bloom syndrome protein) is a RECQ-family helicase involved in the dissolution of complex DNA structures and repair intermediates. Synthetic lethality analysis implicates BLM as a promising target in a range of cancers with defects in the DNA damage response; however, selective small molecule inhibitors of defined mechanism are currently lacking. Here, we identify and characterise a specific inhibitor of BLM’s ATPase-coupled DNA helicase activity, by allosteric trapping of a DNA-bound translocation intermediate. Crystallographic structures of BLM-DNA-ADP-inhibitor complexes identify a hitherto unknown interdomain interface, whose opening and closing are integral to translocation of ssDNA, and which provides a highly selective pocket for drug discovery. Comparison with structures of other RECQ helicases provides a model for branch migration of Holliday junctions by BLM.