Botulinum neurotoxins (BoNTs) are a family of bacterial toxins with seven major serotypes (BoNT/A-G). The ability of these toxins to target and bind to motor nerve terminals is a key factor determining their potency and efficacy. Among these toxins, BoNT/B is one of the two types approved for medical and cosmetic uses. Besides binding to well-established receptors, an extended loop in the C-terminal receptor-binding domain (H-C) of BoNT/B (H-C/B) has been proposed to also contribute to toxin binding to neurons by interacting with lipid membranes (termed lipid-binding loop [LBL]). Analogous loops exist in the H(C)s of BoNT/C, D, G, and a chimeric toxin DC. However, it has been challenging to detect and characterize binding of LBLs to lipid membranes. Here, using the nanodisc system and biolayer interferometry assays, we find that H-C/DC, C, and G, but not H-C/B and H-C/D, are capable of binding to receptor-free lipids directly, with H-C/DC having the highest level of binding. Mutagenesis studies demonstrate the critical role of consecutive aromatic residues at the tip of the LBL for binding of H-C/DC to lipid membranes. Taking advantage of this insight, we then create a gain-of-function mutant H-C/B by replacing two nonaromatic residues at the tip of its LBL with tryptophan. Cocrystallization studies confirm that these two tryptophan residues do not alter the structure of H-C/B or the interactions with its receptors. Such a mutated H-C/B gains the ability to bind receptor-free lipid membranes and shows enhanced binding to cultured neurons. Finally, full-length BoNT/B containing two tryptophan mutations in its LBL, together with two additional mutations (E1191M/S1199Y) that increase binding to human receptors, is produced and evaluated in mice in vivo using Digit Abduction Score assays. This mutant toxin shows enhanced efficacy in paralyzing local muscles at the injection site and lower systemic diffusion, thus extending both safety range and duration of paralysis compared with the control BoNT/B. These findings establish a mechanistic understanding of LBL-lipid interactions and create a modified BoNT/B with improved therapeutic efficacy.