β-Glucosidase (EC 3.2.1.21) plays an essential role in the removal of glycosyl residues from disaccharide cellobiose to produce glucose during the hydrolysis of lignocellulosic biomass. Although there exist a few β-glucosidase that are tolerant to large concentrations of glucose, these enzymes are typically prone to glucose inhibition. Understanding the basis of this inhibition is important for the production of cheaper biofuels from lignocellulose. In this study, all-atom molecular dynamics simulation at different temperatures and glucose concentrations was used to understand the molecular basis of glucose inhibition of GH1 β-glucosidase (B8CYA8) from Halothermothrix orenii. Our results show that glucose induces a broadening of the active site tunnel through residues lining the tunnel and facilitates the accumulation of glucose. In particular, we observed that glucose accumulates at the tunnel entrance and near the catalytic sites to block substrate accessibility and inhibit enzyme activity. The reduction of enzyme activity was also confirmed experimentally through specific activity measurements in the presence of 0-2.5 M glucose. We also show that the increase in glucose concentrations leads to a decrease in the number of water molecules inside the tunnel to affect substrate hydrolysis. Overall, the results help in understanding the role of residues along the active site tunnel for the engineering of glucose-tolerant β-glucosidase.