The study investigates the structural basis of PAM-dependent target DNA recognition by the Cas9 endonuclease. Cas9, an RNA-guided endonuclease, requires a protospacer adjacent motif (PAM) in the target DNA for cleavage. The crystal structure of *Streptococcus pyogenes* Cas9 complexed with a single-molecule guide RNA (sgRNA) and a target DNA containing a canonical 5′-NGG-3′ PAM is reported. The structure reveals that the PAM resides in a base-paired DNA duplex, with the non-complementary strand's GG dinucleotide interacting via major groove interactions with conserved arginine residues from the C-terminal domain of Cas9. Interactions with the minor groove of the PAM duplex and the phosphodiester group at the +1 position contribute to local strand separation of the target DNA duplex upstream of the PAM. These findings suggest a mechanism for PAM-dependent target DNA melting and RNA-DNA hybrid formation. The study also establishes a framework for engineering Cas9 enzymes with novel PAM specificities. The PAM-interacting domain of Cas9 makes further contacts with the minor groove of the PAM duplex, positioning the target DNA strand for base pairing with the guide RNA. The interaction between the +1 phosphate and the phosphate lock loop stabilizes the target DNA strand in an unwound conformation, linking PAM recognition with local strand separation. The study highlights the importance of PAM recognition in Cas9 function and proposes a model for PAM-dependent target DNA recognition and unwinding.The study investigates the structural basis of PAM-dependent target DNA recognition by the Cas9 endonuclease. Cas9, an RNA-guided endonuclease, requires a protospacer adjacent motif (PAM) in the target DNA for cleavage. The crystal structure of *Streptococcus pyogenes* Cas9 complexed with a single-molecule guide RNA (sgRNA) and a target DNA containing a canonical 5′-NGG-3′ PAM is reported. The structure reveals that the PAM resides in a base-paired DNA duplex, with the non-complementary strand's GG dinucleotide interacting via major groove interactions with conserved arginine residues from the C-terminal domain of Cas9. Interactions with the minor groove of the PAM duplex and the phosphodiester group at the +1 position contribute to local strand separation of the target DNA duplex upstream of the PAM. These findings suggest a mechanism for PAM-dependent target DNA melting and RNA-DNA hybrid formation. The study also establishes a framework for engineering Cas9 enzymes with novel PAM specificities. The PAM-interacting domain of Cas9 makes further contacts with the minor groove of the PAM duplex, positioning the target DNA strand for base pairing with the guide RNA. The interaction between the +1 phosphate and the phosphate lock loop stabilizes the target DNA strand in an unwound conformation, linking PAM recognition with local strand separation. The study highlights the importance of PAM recognition in Cas9 function and proposes a model for PAM-dependent target DNA recognition and unwinding.