In the evolutionary arms race against phage, bacteria have assembled a diverse arsenal of antiviral immune strategies. While the recently discovered DISARM (Defense Island System Associated with Restriction-Modification) systems can provide protection against a wide range of phage, the molecular mechanisms that underpin broad antiviral targeting but avoiding autoimmunity remain enigmatic. Here, we report cryo-EM structures of the core DISARM complex, DrmAB, both alone and in complex with an unmethylated phage DNA mimetic. These structures reveal that DrmAB core complex is autoinhibited by a trigger loop (TL) within DrmA and binding to DNA substrates containing a 5' overhang dislodges the TL, initiating a long-range structural rearrangement for DrmAB activation. Together with structure-guided in vivo studies, our work provides insights into the mechanism of phage DNA recognition and specific activation of this widespread antiviral defense system.