Repair of interstrand crosslinks (ICLs) requires multiple-strand incisions to separate the two covalently attached strands of DNA. It is unclear how these incisions are generated. DNA double-strand breaks (DSBs) have been identified as intermediates in ICL repair, but enzymes responsible for producing these intermediates are unknown. Here we show that Mus81, a component of the Mus81-Eme1 structure-specific endonuclease, is involved in generating the ICL-induced DSBs in mouse embryonic stem (ES) cells in S phase. Given the DNA junction cleavage specificity of Mus81-Eme1 in vitro, DNA damage-stalled replication forks are suitable in vivo substrates. Interestingly, generation of DSBs from replication forks stalled due to DNA damage that affects only one of the two DNA strands did not require Mus81. Furthermore, in addition to a physical interaction between Mus81 and the homologous recombination protein Rad54, we show that Mus81(-/-) Rad54(-/-) ES cells were as hypersensitive to ICL agents as Mus81(-/-) cells. We propose that Mus81-Eme1- and Rad54-mediated homologous recombination are involved in the same DNA replication-dependent ICL repair pathway.