Acetyl esterases belonging to the carbohydrate esterase family 16 (CE16) is a growing group of enzymes, with exceptional diversity regarding substrate specificity and regioselectivity. However, further insight into the CE16 specificity is required for their efficient biotechnological exploitation. In this work, exo-deacetylase TtCE16B from Thermothelomyces thermophila was heterologously expressed and biochemically characterized. The esterase targets positions O-3 and O-4 of singly and doubly acetylated non-reducing-end xylopyranosyl residues, provided the presence of a free vicinal hydroxyl group at position O-4 and O-3, respectively. Crystal structure of TtCE16B, the first representative among the CE16 enzymes, in apo- and product-bound form, allowed the identification of residues forming the catalytic triad and oxyanion hole, as well as the structural elements related to the enzyme preference for oligomers. The role of TtCE16B in hemicellulose degradation was investigated on acetylated xylan from birchwood and pre-treated beechwood biomass. TtCE16B exhibited complementary activity to commercially available OCE6 acetylxylan esterase. Moreover, it showed synergistic effects with SrXyl43 β-xylosidase. Overall, supplementation of xylan-targeting enzymatic mixtures with both TtCE16B and OCE6 esterases led to a 3-fold or 4-fold increase in xylose release, when using TmXyn10 and TtXyn30A xylanases respectively.