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Allosteric modulation is a promising strategy for selective kinase inhibition, yet structural insights into allosteric pockets remain limited across the human kinome. In this work, we present comprehensive characterization of a type III allosteric pocket in the insulin receptor kinase (IRK), integrating structural, conformational, and thermodynamic analyses. Specifically, we used microsecond-scale atomistic molecular dynamics simulations in combination with alchemical free energy calculations to investigate apo and inhibitor-bound IRK structures. Our findings indicate that the type III pocket is a "back pocket" in IRK, sandwiched between the N- and C-terminal lobes. It features a hydrophobic cleft of aliphatic and aromatic non-polar residues with a charge center for electrostatic interactions. Our results indicate that the allosteric inhibitor adopts metastable conformations of its 4-carboxamide substituent, with the dominant pose stabilized by parallel stacking against the <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML"> <mml:semantics><mml:mrow><mml:mi>α</mml:mi></mml:mrow> <mml:annotation>$$ \alpha $$</mml:annotation></mml:semantics> </mml:math> C-helix and a persistent hydrogen bond with V1060. As a result, the <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML"> <mml:semantics><mml:mrow><mml:mi>α</mml:mi></mml:mrow> <mml:annotation>$$ \alpha $$</mml:annotation></mml:semantics> </mml:math> C-helix adopts an "out" conformation, promoting an inactive kinase state. Furthermore, MMPBSA calculations and alchemical transformations suggested M1051, F1054, V1060, F1128, and E1043 as critical residue hotspots, highlighting their roles in stabilizing the inhibitor. We observed a helical intermediate in the activation loop and a stable "DFG-out" conformation in both apo and inhibitor bound conformations. Our results further identified M1051 as a key gatekeeper residue that maintains integrity of the <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML"> <mml:semantics><mml:mrow><mml:mi>α</mml:mi></mml:mrow> <mml:annotation>$$ \alpha $$</mml:annotation></mml:semantics> </mml:math> C-helix and regulates allosteric inhibitor binding. Our findings also revealed mechanistic details of inhibitor binding and the structural features of the type III pocket in IRK, aiding the design of selective allosteric modulators for receptor tyrosine kinases.