Background Bispecific T cell engaging antibodies (TEAs) with one arm targeting a cancer antigen and another arm binding to CD3 have demonstrated impressive efficacy in multiple clinical studies. However, establishing a safety/efficacy balance remains challenging. For instance, some TEAs have severe safety issues. Additionally, not all patients or all cancer cells of one patient respond equally to TEAs. Methods Here, we developed a next-generation bispecific TEA with better safety/efficacy balance and expanded mechanisms of action. Using the computer-aided antibody design strategy, we replaced heavy chain complementarity-determining regions (HCDRs) in one Rituximab arm with HCDRs from a CD3 antibody and generated a novel CD20/CD3 bispecific antibody. Results After series of computer-aided sequence optimization, the lead molecule, GB261, showed great safety/efficacy balance both in vitro and in animal studies. GB261 exhibited high affinity to CD20 and ultra-low affinity to CD3. It showed comparable T cell activation and reduced cytokine secretion compared with a benchmark antibody (BM). ADCC and CDC caused by GB261 only killed CD20+ cells but not CD3+ cells. It exhibited better RRCL cell killing than the BM in a PBMC-engrafted, therapeutic treatment mouse model and good safety in cynomolgus monkeys. Conclusions Thus, GB261 is a promising novel TEA against CD20+ cancers.