The lactose permease of (LacY), a dynamic polytopic membrane transport protein, catalyzes galactoside/H symport and operates by an alternating access mechanism that exhibits multiple conformations, the distribution of which is altered by sugar-binding. Camelid nanobodies were made against a double-mutant Gly46 → Trp/Gly262 → Trp (LacY) that produces an outward-open conformation, as opposed to the cytoplasmic open-state crystal structure of WT LacY. Nanobody 9047 (Nb9047) stabilizes WT LacY in a periplasmic-open conformation. Here, we describe the X-ray crystal structure of a complex between LacY, the high-affinity substrate analog 4-nitrophenyl-α-d-galactoside (NPG), and Nb9047 at 3-Å resolution. The present crystal structure demonstrates that Nb9047 binds to the periplasmic face of LacY, primarily to the C-terminal six-helical bundle, while a flexible loop of the Nb forms a bridge between the N- and C-terminal halves of LacY across the periplasmic vestibule. The bound Nb partially covers the vestibule, yet does not affect the on-rates or off-rates for the substrate binding to LacY, which implicates dynamic flexibility of the Nb-LacY complex. Nb9047-binding neither changes the overall structure of LacY with bound NPG, nor the positions of side chains comprising the galactoside-binding site. The current NPG-bound structure exhibits a more occluded periplasmic vestibule than seen in a previous structure of a (different Nb) apo-LacY/Nb9039 complex that we argue is caused by sugar-binding, with major differences located at the periplasmic ends of transmembrane helices in the N-terminal half of LacY.