Fungal glucose dehydrogenases (GDHs) are FAD-dependent enzymes belonging to the glucose-methanol-choline oxidoreductase superfamily. These enzymes are classified in the “Auxiliary Activity” family 3 (AA3) of the Carbohydrate-Active enZymes database, and more specifically in subfamily AA3_2, that also includes the closely related flavoenzymes aryl-alcohol oxidase and glucose 1-oxidase. Based on sequence similarity to known fungal GDHs, an AA3_2 enzyme active on glucose was identified in the genome of Pycnoporus cinnabarinus , a model Basidiomycete able to completely degrade lignin. Results In our work, substrate screening and functional characterization showed an unexpected preferential activity of this enzyme toward oligosaccharides containing a β(1→3) glycosidic bond, with the highest efficiency observed for the disaccharide laminaribiose. Despite its sequence similarity to GDHs, we defined a novel enzymatic activity, namely oligosaccharide dehydrogenase (ODH), for this enzyme. The crystallographic structures of ODH in the sugar-free form and in complex with glucose and laminaribiose unveiled a peculiar saccharide recognition mechanism which is not shared with previously characterized AA3 oxidoreductases and accounts for ODH preferential activity toward oligosaccharides. The sugar molecules in the active site of ODH are mainly stabilized through CH-π interactions with aromatic residues rather than through hydrogen bonds with highly conserved residues, as observed instead for the fungal glucose dehydrogenases and oxidases characterized to date. Finally, three sugar-binding sites were identified on ODH external surface, which were not previously observed and might be of importance in the physiological scenario. Conclusions Structure–function analysis of ODH is consistent with its role as an auxiliary enzyme in lignocellulose degradation and unveils yet another enzymatic function within the AA3 family of the Carbohydrate-Active enZymes database. Our findings allow deciphering the molecular determinants of substrate binding and provide insight into the physiological role of ODH, opening new perspectives to exploit biodiversity for lignocellulose transformation into fuels and chemicals.