Recent findings intriguingly place DNA double-strand break repair proteins at chromosome ends in yeast, where they help maintain normal telomere length and structure. In the present study, an essential telomere function, the ability to cap and thereby protect chromosomes from end-to-end fusions, was assessed in repair-deficient mouse cell lines. By using fluorescence in situ hybridization with a probe to telomeric DNA, spontaneously occurring chromosome aberrations were examined for telomere signal at the points of fusion, a clear indication of impaired end-capping. Telomeric fusions were not observed in any of the repair-proficient controls and occurred only rarely in a p53 null mutant. In striking contrast, chromosomal end fusions that retained telomeric sequence were observed in nontransformed DNA-PK(cs)-deficient cells, where they were a major source of chromosomal instability. Metacentric chromosomes created by telomeric fusion became even more abundant in these cells after spontaneous immortalization. Restoration of repair proficiency through transfection with a functional cDNA copy of the human DNA-PK(cs) gene reduced the number of fusions compared with a negative transfection control. Virally transformed cells derived from Ku70 and Ku80 knockout mice also displayed end-to-end fusions. These studies demonstrate that DNA double-strand break repair genes play a dual role in maintaining chromosomal stability in mammalian cells, the known role in repairing incidental DNA damage, as well as a new protective role in telomeric end-capping.