Bacteria deploy multiple defenses to prevent mobile genetic element (MGEs) invasion. CRISPR-Cas immune systems feature RNA-guided nucleases that target MGEs, which counter with anti-CRISPR (Acr) proteins. Our understanding of the biology and co-evolutionary dynamics of the common Type I-C CRISPR-Cas subtype has lagged because it lacks an in vivo phage-host model system. Here, we show the anti-phage function of a Pseudomonas aeruginosa Type I-C CRISPR-Cas system encoded on an active conjugative pKLC102 island, and the inhibition of this system by multiple distinct MGEs encoding a diverse repertoire of Type I-C Acr proteins. Seven distinct AcrIC proteins were identified, with four of them, including previously described DNA mimic AcrIF2 (now AcrIF2*), surprisingly also inhibiting other P. aeruginosa CRISPR-Cas subtypes (Type I-E or I-F). Dual inhibition comes at a cost, however, as the simultaneous expression of Type I-F and Type I-C systems rendered phages expressing AcrIF2* more sensitive to targeting. This effect was exacerbated by mutagenesis of AcrIF2’s acidic residues, which made AcrIF2 defective for Type I-C inhibition, but only when in competition with the Type I-F complex. Like AcrIF2*, five of the AcrIC proteins block DNA binding by the crRNA-guided Cascade complex, while two function downstream of DNA binding, likely preventing Cas3 recruitment or activity. One such inhibitor, AcrIC3, is found encoded alongside bona fide Cas3 inhibitors, AcrIF3 and AcrIE1 in conjugative elements, forming an “anti-Cas3” cluster. Collectively, our findings demonstrate an active battle between an MGE- encoded CRISPR-Cas system and its diverse MGE targets. On the technological angle, CRISPR–Cas enzymes have enabled programmable gene editing in eukaryotes and prokaryotes. However, the leading Cas9 and Cas12a enzymes are limited in their ability to make large deletions. Here, we used the processive nuclease Cas3, together with a minimal Type I-C Cascade-based system for targeted genome engineering in bacteria. DNA cleavage guided by a single CRISPR RNA generated large deletions (7–424 kilobases) in Pseudomonas aeruginosa with near-100 percent efficiency, while Cas9 yielded small deletions and point mutations. Cas3 generated bidirectional deletions originating from the programmed site, which was exploited to reduce the P. aeruginosa genome by 837 kb (13.5 percent). Large deletion boundaries were efficiently specified by a homology-directed repair template during editing with Cascade–Cas3, but not Cas9. A transferable ‘all-in-one’ vector was functional in Escherichia coli, Pseudomonas syringae and Klebsiella pneumoniae, and endogenous CRISPR–Cas use was enhanced with an ‘anti-anti-CRISPR’ strategy. P. aeruginosa Type I-C Cascade–Cas3 (PaeCas3c) facilitates rapid strain manipulation with applications in synthetic biology, genome minimization and the removal of large genomic regions.