The M4 muscarinic acetylcholine receptor (mAChR) is a well validated drug target for the treatment of central nervous system disorders with multiple drug candidates now progressing through clinical trials. Decades of prior research at the M4 mAChR emphasize both the promise and challenges of selective allosteric drug discovery that include the need to understand how allosteric modulators mediate their signalling effects. Here, we present four high-resolution cryoelectron microscopy (cryo-EM) structures of the M4 mAChR, including one with acetylcholine (ACh), the endogenous agonist, and three with the high-affinity synthetic agonist iperoxo in the absence and presence of two positive allosteric modulators (PAMs), LY2033298 and VU0467154. Both PAMs have similar chemical scaffolds, but exhibit distinct pharmacological profiles. The cryo-EM structures combined with molecular dynamics simulations and pharmacological characterizations support a mechanism where the degree of the allosteric effects of the PAMs correlates with stabilization of the active conformation of the receptor. Our findings provide important insights into key paradigms of G protein-coupled receptor (GPCR) allostery including orthosteric activation, allosteric activation, allosteric modulation, probe dependence, and species selectivity.