Mutations in BLM, which encodes a RecQ helicase, give rise to Bloom's syndrome, a disorder associated with cancer predisposition and genomic instability. A defining feature of Bloom's syndrome is an elevated frequency of sister chromatid exchanges. These arise from crossing over of chromatid arms during homologous recombination, a ubiquitous process that exists to repair DNA double-stranded breaks and damaged replication forks. Whereas crossing over is required in meiosis, in mitotic cells it can be associated with detrimental loss of heterozygosity. BLM forms an evolutionarily conserved complex with human topoisomerase IIIalpha (hTOPO IIIalpha), which can break and rejoin DNA to alter its topology. Inactivation of homologues of either protein leads to hyper-recombination in unicellular organisms. Here, we show that BLM and hTOPO IIIalpha together effect the resolution of a recombination intermediate containing a double Holliday junction. The mechanism, which we term double-junction dissolution, is distinct from classical Holliday junction resolution and prevents exchange of flanking sequences. Loss of such an activity explains many of the cellular phenotypes of Bloom's syndrome. These results have wider implications for our understanding of the process of homologous recombination and the mechanisms that exist to prevent tumorigenesis.