Loperamide is an opioid-receptor agonist and acts on the μ-opioid receptors in the myenteric plexus of the large intestine; by itself it does not affect the central nervous system. It works similarly to morphine, by decreasing the activity of the myenteric plexus, which in turn decreases the tone of the longitudinal and circular smooth muscles of the intestinal wall.

It is a misconception that loperamide does not cross the blood–brain barrier.
Concurrent administration of P-glycoprotein inhibitors such as quinidine and its other isomer quinine (although much higher doses must be used), PPIs like omeprazole (Prilosec OTC) and even black pepper (piperine as the active ingredient) could potentially allow loperamide to cross the blood–brain barrier. It should however be noted that only quinidine with loperamide was found to produce respiratory depression, indicative of central opioid action.