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Summary Establishment of symbiosis between plants and arbuscular mycorrhizal (AM) fungi depends on fungal chitooligosaccharides (COs) and lipo‐chitooligosaccharides (LCOs). The latter are also produced by nitrogen‐fixing rhizobia to induce nodules on leguminous roots. However, host enzymes regulating structure and levels of these signals remain largely unknown.Here, we analyzed the expression of a β‐N‐acetylhexosaminidase gene ofMedicago truncatula(MtHEXO2) and biochemically characterized the enzyme. Mutant analysis was performed to study the role ofMtHEXO2during symbiosis.We found that expression ofMtHEXO2is associated with AM symbiosis and nodulation.MtHEXO2expression in the rhizodermis was upregulated in response to applied chitotetraose, chitoheptaose, and LCOs.M. truncatulamutants deficient in symbiotic signaling did not show induction ofMtHEXO2. Subcellular localization analysis indicated that MtHEXO2 is an extracellular protein. Biochemical analysis showed that recombinant MtHEXO2 does not cleave LCOs but can degrade COs intoN‐acetylglucosamine (GlcNAc).Hexo2mutants exhibited reduced colonization by AM fungi; however, nodulation was not affected inhexo2mutants.In conclusion, we identified an enzyme, which inactivates COs and promotes the AM symbiosis. We hypothesize that GlcNAc produced by MtHEXO2 may function as a secondary symbiotic signal.