The PAM sequence is necessary in allowing the Cas9 nuclease to form double strand breaks (DSBs) at the target site of the DNA. It is thought the PAM site causing the destabilisation of the Cas9 nuclease, inducing DSBs.
The PAM site will always be at the 3’ end of the sgRNA sequence, and with S. pyogenes Cas9, will be 5’-NGG-3’. Other Cas9 nucleases can be used to induce DSBs at other PAM sites.