Clustered Regularly Interspaced Short Palindromic Repeats (CRISPRs) and the associated proteins (Cas) comprise a system of adaptive immunity against viruses and plasmids in prokaryotes. Cas1 is a CRISPR‐associated protein that is common to all CRISPR‐containing prokaryotes but its function remains obscure. Here we show that the purified Cas1 protein of Escherichia coli (YgbT) exhibits nuclease activity against single‐stranded and branched DNAs including Holliday junctions, replication forks and 5′‐flaps. The crystal structure of YgbT and site‐directed mutagenesis have revealed the potential active site. Genome‐wide screens show that YgbT physically and genetically interacts with key components of DNA repair systems, including recB, recC and ruvB. Consistent with these findings, the ygbT deletion strain showed increased sensitivity to DNA damage and impaired chromosomal segregation. Similar phenotypes were observed in strains with deletion of CRISPR clusters, suggesting that the function of YgbT in repair involves interaction with the CRISPRs. These results show that YgbT belongs to a novel, structurally distinct family of nucleases acting on branched DNAs and suggest that, in addition to antiviral immunity, at least some components of the CRISPR–Cas system have a function in DNA repair.