CRISPR-Cas9 has revolutionized genome engineering applications by programming its single-guide RNA, where high specificity is required. However, the precise molecular mechanism underscoring discrimination between on/off-target DNA sequences, relative to the guide RNA template, remains elusive. Here, using methyl-based NMR to study multiple holoenzymes assembled in vitro, we elucidate a discrete protein conformational state which enables recognition of DNA mismatches at the protospacer adjacent motif (PAM)-distal end. Our results delineate an allosteric pathway connecting a dynamic conformational switch at the REC3 domain, with the sampling of a catalytically competent state by the HNH domain. Our NMR data show that HiFi Cas9 (R691A) increases the fidelity of DNA recognition by stabilizing this "surveillance state" for mismatched substrates, shifting the Cas9 conformational equilibrium away from the active state. These results establish a paradigm of substrate recognition through an allosteric protein-based switch, providing unique insights into the molecular mechanism which governs Cas9 selectivity.