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The cyanobacterium Synechococcus elongatus PCC 7942 produces an active prokaryotic Argonaute nuclease, SeAgo, whose function is unknown. Here, we show that SeAgo reduces natural transformation and prevents the maintenance of RSF1010 replicons in S. elongatus. In addition, a Cas4-like nuclease and two other proteins, UvrD and RecJcy (cyanobacterial lineage), were found to reduce the transfer or maintenance of RSF1010 replicons. Like other prokaryotic Argonautes, our results indicate that SeAgo provides defense against invading DNA. An S. elongatus ago deletion strain shares the same morphology, growth rate, and circadian gene expression as the wild type, has higher transformation efficiency, and enables the use of RSF1010-based plasmids for genetic engineering. IMPORTANCE S. elongatus is an important cyanobacterial model organism for the study of its prokaryotic circadian clock, photosynthesis, and other biological processes. It is also widely used for genetic engineering to produce renewable biochemicals. Our findings reveal an SeAgo-based defense mechanism in S. elongatus against the horizontal transfer of genetic material. We demonstrate that deletion of the ago gene facilitates genetic studies and genetic engineering of S. elongatus.