The influenza virus PA endonuclease, which cleaves capped host pre-mRNAs to initiate synthesis of viral mRNA, is a prime target for antiviral therapy. The diketo acid compound L-742,001 was previously identified as a potent inhibitor of the influenza virus endonuclease reaction, but information on its precise binding mode to PA or potential resistance profile is limited. Computer-assisted docking of L-742,001 into the crystal structure of inhibitor-free N-terminal PA (PA-Nter) indicated a binding orientation distinct from that seen in a recent crystallographic study with L-742,001-bound PA-Nter (R. M. DuBois et al., PLoS Pathog. 8:e1002830, 2012). A comprehensive mutational analysis was performed to determine which amino acid changes within the catalytic center of PA or its surrounding hydrophobic pockets alter the antiviral sensitivity to L-742,001 in cell culture. Marked (up to 20-fold) resistance to L-742,001 was observed for the H41A, I120T, and G81F/V/T mutant forms of PA. Two- to 3-fold resistance was seen for the T20A, L42T, and V122T mutants, and the R124Q and Y130A mutants were 3-fold more sensitive to L-742,001. Several mutations situated at noncatalytic sites in PA had no or only marginal impact on the enzymatic functionality of viral ribonucleoprotein complexes reconstituted in cell culture, consistent with the less conserved nature of these PA residues. Our data provide relevant insights into the binding mode of L-742,001 in the PA endonuclease active site. In addition, we predict some potential resistance sites that should be taken into account during optimization of PA endonuclease inhibitors toward tight binding in any of the hydrophobic pockets surrounding the catalytic center of the enzyme.