Argonautes (AGOs) are present in all domains of life. Like their eukaryotic counterparts, archaeal and eubacterial AGOs adopt a similar global architecture and bind small nucleic acids. In many eukaryotes, AGOs, guided by short RNA sequences, defend cells against transposons and viruses. In the eubacterium Thermus thermophilus, the DNA-guided Argonaute TtAgo defends against transformation by DNA plasmids. We find that TtAgo also participates in DNA replication. In vivo, TtAgo binds 15–18 nt DNA guides derived from the chromosomal region where replication terminates, and TtAgo complexed to short DNA guides enhances target finding and prefers to bind targets with full complementarity. Additionally, TtAgo associates with proteins known to act in DNA replication. When gyrase, the sole T. thermophilus type II topoisomerase, is inhibited, TtAgo allows the bacterium to finish replicating its circular genome. In contrast, loss of both gyrase and TtAgo activity slows growth and produces long, segmented filaments in which the individual bacteria are linked by DNA. Furthermore, wild-type T. thermophilus outcompetes an otherwise isogenic strain lacking TtAgo. Finally, at physiologic temperature in vitro, we find TtAgo possesses highest affinity for fully complementary targets. We propose that terminus-derived guides binding in such a fashion localize TtAgo, and that the primary role of TtAgo is to help T. thermophilus disentangle the catenated circular chromosomes generated by DNA replication.