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Paenibacillus larvae, the etiological agent of the globally occurring epizootic American Foulbrood (AFB) of honey bees, causes intestinal infections in honey bee larvae which develop into systemic infections inevitably leading to larval death. Massive brood mortality might eventually lead to collapse of the entire colony. Molecular mechanisms of host-microbe interactions in this system and of differences in virulence between P. larvae genotypes are poorly understood. Recently, it was demonstrated that the degradation of the peritrophic matrix lining the midgut epithelium is a key step in pathogenesis of P. larvae infections. Here, we present the isolation and identification of PlCBP49, a modular, chitin-degrading protein of P. larvae and demonstrate that this enzyme is crucial for the degradation of the larval peritrophic matrix during infection. PlCBP49 contains a module belonging to the auxiliary activity 10 (AA10, formerly CBM33) family of lytic polysaccharide monooxygenases (LPMOs) which are able to degrade recalcitrant polysaccharides. Using chitin-affinity purified PlCBP49, we provide evidence that PlCBP49 degrades chitin via a metal ion-dependent, oxidative mechanism, as already described for members of the AA10 family. Using P. larvae mutants lacking PlCBP49 expression, we analyzed in vivo biological functions of PlCBP49. In the absence of PlCBP49 expression, peritrophic matrix degradation was markedly reduced and P. larvae virulence was nearly abolished. This indicated that PlCBP49 is a key virulence factor for the species P. larvae. The identification of the functional role of PlCBP49 in AFB pathogenesis broadens our understanding of this important family of chitin-binding and -degrading proteins, especially in those bacteria that can also act as entomopathogens.