Phosphoglycerate dehydrogenase (PHGDH) is known to be the rate-limiting enzyme in the serine synthesis pathway in humans. It converts glycolysis-derived 3-phosphoglycerate to 3-phosphopyruvate in a co-factor-dependent oxidation reaction. Herein, we report the discovery of BI-4916, a prodrug of the co-factor nicotinamide adenine dinucleotide (NADH/NAD+)-competitive PHGDH inhibitor BI-4924, which has shown high selectivity against the majority of other dehydrogenase targets. Starting with a fragment-based screening, a subsequent hit optimization using structure-based drug design was conducted to deliver a single-digit nanomolar lead series and to improve potency by 6 orders of magnitude. To this end, an intracellular ester cleavage mechanism of the ester prodrug was utilized to achieve intracellular enrichment of the actual carboxylic acid based drug and thus overcome high cytosolic levels of the competitive cofactors NADH/NAD+.