In response to predation by bacteriophages and invasion by other mobile genetic elements such as plasmids, bacteria have evolved specialised defence systems that are often clustered together on genomic islands. The O1 El Tor strains of Vibrio cholerae responsible for the ongoing seventh cholera pandemic (7PET) contain a characteristic set of genomic islands involved in host colonisation and disease, many of which contain defence systems. Notably, Vibrio pathogenicity island 2 contains several characterised defence systems as well as a putative Type I restriction-modification system (T1RM), which, interestingly, is interrupted by two genes of unknown function. Here, we demonstrate that the T1RM system is active, methylates the host genomes of a representative set of 7PET strains, and identify a specific recognition sequence that targets non-methylated plasmids for restriction. We go on to show that the two genes embedded within the T1RM system encode a novel two-protein modification-dependent restriction system related to the GmrSD family of Type IV restriction enzymes. Indeed, we show that this system has potent anti-phage activity against diverse members of the Tevenvirinae, a subfamily of bacteriophages with hypermodified genomes. Taken together these results expand our understanding of how this highly conserved genomic island contributes to the defence of pandemic V. cholerae against foreign DNA.