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Nirmatrelvir is an orally available inhibitor of SARS-CoV-2 main protease (Mpro) and the main ingredient of PAXLOVID, a drug approved by FDA for high-risk COVID-19 patients. Recently, a rare natural mutation, H172Y, was found to significantly reduce nirmatrelvir's inhibitory activity. As the COVID-19 cases skyrocket in China and the selective pressure of antiviral therapy builds up in the US, there is an urgent need to characterize and understand how the H172Y mutation confers drug resistance. Here we investigated the H172Y Mpro's conformational dynamics, folding stability, catalytic efficiency, and inhibitory activity using all-atom constant pH and fixed-charge molecular dynamics simulations, alchemical and empirical free energy calculations, artificial neural networks, and biochemical experiments. Our data suggests that the mutation significantly weakens the S1 pocket interactions with the N-terminus and perturbs the conformation of the oxyanion loop, leading to a decrease in the thermal stability and catalytic efficiency. Importantly, the perturbed S1 pocket dynamics weakens the nirma-trelvir binding in the P1 position, which explains the decreased inhibitory activity of nirmatrelvir. Our work demonstrates the predictive power of the combined simulation and artificial intel-ligence approaches, and together with biochemical experiments they can be used to actively surveil continually emerging mutations of SARS-CoV-2 Mpro and assist the discovery of new antiviral drugs. The presented workflow can be applicable to characterize mutation effects on any protein drug targets.