The pope has written a detailed and personal repudiation of the idea that the Jews were collectively responsible for the death of Jesus.
In a book to be published next week, he concludes that those responsible for the crucifixion were the "Temple aristocracy" and supporters of the rebel Barabbas.
Dismissing the centuries-old interpretation of St John's assertion that it was "the Jews" who demanded Barabbas's release and Jesus's execution, the pontiff asks: "How could the whole people have been present at this moment to clamour for Jesus's death?"
The notion of collective Jewish guilt, which bedevilled relations between the two faiths, was disowned by the Roman Catholic church at the second Vatican council in 1965. But this is thought to be the first time a pope has carried out such a detailed, theological demolition of the concept.
It is particularly significant coming from the pen of a German-born pontiff who has more than once been at the eye of a storm in Jewish-Catholic relations. Elan Steinberg, vice-president of the American Gathering of Holocaust Survivors and their Descendants, told Reuters: "This is a major step forward. This is a personal repudiation of the theological underpinning of centuries of antisemitism."
Benedict's analysis featured in extracts from the second volume of his work, Jesus of Nazareth, released on Wednesday by the Vatican's publishers. The first volume was published four years ago. The second, due out on 10 March, deals with Jesus's later life, death and the resurrection that is central to Christian belief.
The pope also focuses on another phrase from the gospel often used against Jews. St Matthew describes the crowd as saying: "His blood be on us and on our children."
Benedict writes that Jesus's death was not about punishment, but salvation. The blood he shed "does not cry out for vengeance and punishment, it brings reconciliation," he writes.
The pope, who as a young boy belonged to the Hitler Youth, attracted a barrage of criticism two years ago he when he lifted the excommunication of an ultra-traditionalist British bishop, Richard Williamson, who had cast doubt on the extent of the Holocaust.
Later the same year he was criticised for furthering the advance towards sainthood of Pius XII. The Vatican lauds the wartime pope for working quietly to save Jewish lives, but his critics argue he should have openly denounced the Nazis' genocide.