Positive allosteric modulators (PAMs) of metabotropic glutamate receptor type 5 (mGluR5), a prototypical class C G protein-coupled receptor (GPCR), have shown therapeutic potential for various neurological disorders. Understanding the allosteric activation mechanism is essential for the rational design of mGluR5 PAMs. We studied the actions of positive and negative allosteric modulators within the transmembrane domain of mGluR5, using enhance-sampling all-atom molecular dynamics simulations. We found dual binding modes of the PAM, associated with distinct shapes of the allosteric pocket. The negative allosteric modulators, in contrast, showed only one binding mode. The simulations revealed the mechanism by which the PAM activated the receptor, in the absence of the orthosteric agonist (the so-called allosteric agonism). The mechanism relied on dynamic communications between amino-acid motifs that are highly conserved across class C GPCRs. The findings may guide structure-based design and virtual screening of allosteric modulators for mGluR5 as well as for other class C GPCRs.