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Catalytically Active Cas9 Mediates Transcriptional Interference to Facilitate Bacterial Virulence.In addition to defense against foreign DNA, the CRISPR-Cas9 system of Francisella novicida represses expression of an endogenous immunostimulatory lipoprotein. We investigated the specificity and molecular mechanism of this regulation, demonstrating that Cas9 controls a highly specific regulon of four genes that must be repressed for bacterial virulence. Regulation occurs through a protospacer adjacent motif (PAM)-dependent interaction of Cas9 with its endogenous DNA targets, dependent on a non-canonical small RNA (scaRNA) and tracrRNA. The limited complementarity between scaRNA and the endogenous DNA targets precludes cleavage, highlighting the evolution of scaRNA to repress transcription without lethally targeting the chromosome. We show that scaRNA can be reprogrammed to repress other genes, and with engineered, extended complementarity to an exogenous target, the repurposed scaRNA:tracrRNA-FnoCas9 machinery can also direct DNA cleavage. Natural Cas9 transcriptional interference likely represents a broad paradigm of regulatory functionality, which is potentially critical to the physiology of numerous Cas9-encoding pathogenic and commensal organisms.