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The sigma-2 receptor/transmembrane protein 97 (σ2R/TMRM97) is a promising biomarker of tumor proliferation and a target for cancer therapy. [³H]DTG has been used to evaluate σ2R/TMEM97 binding affinity in compound development studies. However, [³H]DTG has equal and moderate binding affinities to both sigma 1 receptor (σ1R) and σ2R/TMEM97. Furthermore, co-administration with the σ1R masking compound (+)-pentazocine may cause bias in σ2R/TMEM97 binding affinity screening experiments. We have developed a radioiodinated ligand, [¹²⁵I]RHM-4, which has high affinity and selectivity for σ2R/TMEM97 versus σ1R. In this study, a head-to-head comparison between [³H]DTG and [¹²⁵I]RHM-4 on the binding affinity and their effectiveness in σ2R/TMEM97 compound screening studies was performed. The goal of these studies was to determine if this radioiodinated ligand is a suitable replacement for [³H]DTG for screening new σ2R/TMEM97 compounds. Furthermore, to delineate the binding properties of [¹²⁵I]RHM-4 to the σ2R/TMEM97, the structure of RHM-4 was split into two fragments. This resulted in the identification of two binding regions in the σ2R, the “DTG” binding site, which is responsible for binding to the σ2R/TMEM97, and the secondary binding site, which is responsible for high affinity and selectivity for the σ2R/TMEM97 versus the σ1R. The results of this study indicate that [¹²⁵I]RHM-4 is an improved radioligand for in vitro binding studies of the σ2R/TMEM97 versus [³H]DTG.