Emerging evidence supports the argument that some prokaryotic argonautes (pAgos) serve as a defensive system against invasion of viruses and plasmids through guide DNAs (gDNAs) directed DNA cleavage. This DNA-guided DNA interference motivates research to induce genomic mutations via pAgo mediated cleavage. Here we demonstrate that CbAgo, a pAgo from Clostridium butyricum, is able to induce chromosomal recombination between direct repeat sequences via its gDNA-directed cleavage in Escherichia coli chromosome. We also show that CbAgo targeting can assist Lambda-Red recombineering in RecA-deficient strain. Our study reveals that cleavage by CbAgo in E. coli chromosome can be mutagenic and suggests its broader application in genetic manipulation.