Mycoplasma bovis (M. bovis) is characterized by a reduced genomic size and limited synthetic capacity, including the inability to synthesize nucleotides de novo, relies on nucleases for nutrient acquisition and survival. A number of nucleases have been implicated in M. bovis pathogenicity, facilitating substrate degradation and contributing to DNA repair mechanisms that enhance bacterial persistence. The present study confirmed that the T5.808 mutant, in which a novel nuclease gene (Mbov_0701) was disrupted by the mini-Tn4001 transposon, exhibits a growth defect when co-cultured with EBL cells. However, the restoration of Mbov_0701 resulted in the resumption of growth in the mutant. The characterization of MbovP701 revealed that it had high activity in hydrolyzing dsDNA with 5′- to 3′- polarity. Furthermore, the substrates of MbovP701 were extended to include linear dsDNA, ssDNA, RNA, and plasmid DNA. The exonuclease activity is dependent on the presence of Mn²⁺ and/or Mg²⁺ ions, with an optimal pH and temperature of 8.3 and 43 °C, respectively. The truncation experiments of rMbovP701 revealed that YqaJ (41–185 aa) is the key functional domain of MbovP701 exonuclease. In conclusion, the present study identified a novel nuclease in M. bovis that plays an essential role in the proliferation of this minimal organism. This finding elucidates the survival strategy and pathogenesis of M. bovis, suggesting a potential therapeutic strategy for the treatment of M. bovis through targeting the inhibition of MbovP701. Moreover, it provides a foundation for future investigations into the interactions between MbovP701 and other nucleases involved in M. bovis biology.