The newly-emerging Middle East respiratory syndrome coronavirus (MERS-CoV) can cause severe and fatal acute respiratory disease in humans. Despite global efforts, the potential for an associated pandemic in the future cannot be excluded. The development of effective counter-measures is urgent. MERS-CoV-specific anti-viral drugs or vaccines are not yet available. Using the spike receptor-binding domain of MERS-CoV (MERS-RBD) to immunize mice, we identified two neutralizing monoclonal antibodies (mAbs) 4C2 and 2E6. Both mAbs potently bind to MERS-RBD and block virus entry in vitro with high efficacy. We further investigated their mechanisms of neutralization by crystallizing the complex between the Fab fragments and the RBD, and solved the structure of the 4C2 Fab/MERS-RBD complex. The structure showed that 4C2 recognizes an epitope that partially overlaps the receptor-binding footprint in MERS-RBD, thereby interfering with the virus/receptor interactions by both steric hindrance and interface-residue competition. 2E6 also blocks receptor binding, and competes with 4C2 for binding to MERS-RBD. Based on the structure, we further humanized 4C2 by preserving only the paratope residues and substituting the remaining amino acids with the counterparts from human immunoglobulins. The humanized 4C2 (4C2h) antibody sustained similar neutralizing activity and biochemical characteristics to the parental mouse antibody. Finally, we showed that 4C2h can significantly abate the virus titers in lungs of Ad5-hCD26-transduced mice infected with MERS-CoV, therefore representing a promising agent for prophylaxis and therapy in clinical settings.