C2c1 is a type V-B CRISPR-Cas system dual-RNA-guided DNA endonuclease. Here, we report the crystal structure of Alicyclobacillus acidoterrestris C2c1 in complex with a chimeric single-molecule guide RNA (sgRNA). AacC2c1 exhibits a bi-lobed architecture consisting of a REC and NUC lobe. The sgRNA scaffold forms a tetra-helical structure, distinct from previous predictions. The crRNA is located in the central channel of C2c1, and the tracrRNA resides in an external surface groove. Although AacC2c1 lacks a PAM-interacting domain, our analysis revealed that the PAM duplex has a similar binding position found in Cpf1. Importantly, C2c1-sgRNA system is highly sensitive to single-nucleotide mismatches between guide RNA and target DNA. The resulting reduction in off-target cleavage renders C2c1 a valuable addition to the current arsenal of genome-editing tools. Together, our findings indicate that sgRNA assembly is achieved through a mechanism distinct from that reported previously for Cas9 or Cpf1 endonucleases. Display omitted •Crystal structure of Alicyclobacillus acidoterrestris C2c1-sgRNA complex•Mechanistic insights into dual-RNA-guided, C2c1-catalyzed, staggered dsDNA breaks•High mismatch sensitivity of C2c1 reduces off-target cleavage•Join 2/4-truncated sgRNA-guided DNA cleavage similar to that of wild-type sgRNA Liu et al. report the structure of C2c1-a type V-B CRISPR-Cas endonuclease, in complex with a chimeric single guide RNA, providing insights into the high specificity of DNA cleavage by C2c1. C2c1’s low off-target rate makes it a valuable addition to the current arsenal of gene-editing tools.