Class 2 CRISPR effectors Cas9 and Cas12 may have evolved from nucleases in IS200/IS605 transposons. IscB is about two-fifths the size of Cas9 but shares a similar domain organization. The associated ωRNA plays the combined role of CRISPR RNA (crRNA) and trans-activating CRISPR RNA (tracrRNA) to guide double-stranded DNA (dsDNA) cleavage. Here we report a 2.78-angstrom cryo-electron microscopy structure of IscB-ωRNA bound to a dsDNA target, revealing the architectural and mechanistic similarities between IscB and Cas9 ribonucleoproteins. Target-adjacent motif recognition, R-loop formation, and DNA cleavage mechanisms are explained at high resolution. ωRNA plays the equivalent function of REC domains in Cas9 and contacts the RNA-DNA heteroduplex. The IscB-specific PLMP domain is dispensable for RNA-guided DNA cleavage. The transition from ancestral IscB to Cas9 involved dwarfing the ωRNA and introducing protein domain replacements.