Salmeterol is a partial agonist for the β2 adrenergic receptor (β2AR) and the first long-acting β2AR agonist to be widely used clinically for the treatment of asthma and chronic obstructive pulmonary disease. Salmeterol's safety and mechanism of action have both been controversial. To understand its unusual pharmacological action and partial agonism, we obtained the crystal structure of salmeterol-bound β2AR in complex with an active-state-stabilizing nanobody. The structure reveals the location of the salmeterol exosite, where sequence differences between β1AR and β2AR explain the high receptor-subtype selectivity. A structural comparison with the β2AR bound to the full agonist epinephrine reveals differences in the hydrogen-bond network involving residues Ser2045.43 and Asn2936.55. Mutagenesis and biophysical studies suggested that these interactions lead to a distinct active-state conformation that is responsible for the partial efficacy of G-protein activation and the limited β-arrestin recruitment for salmeterol.