Members of the RecQ helicase family play critical roles in genome maintenance. There are five RecQ homologs in mammals, and defects in three of these (BLM, WRN, and RECQL4) give rise to cancer predisposition syndromes in humans. RECQL and RECQL5 have not been associated with a human disease. Here we show that deletion of Recql5 in mice results in cancer susceptibility. Recql5-deficient cells exhibit elevated frequencies of spontaneous DNA double-strand breaks and homologous recombination (HR) as scored using a reporter that harbors a direct repeat, and are prone to gross chromosomal rearrangements in response to replication stress. To understand how RECQL5 regulates HR, we use purified proteins to demonstrate that human RECQL5 binds the Rad51 recombinase and inhibits Rad51-mediated D-loop formation. By biochemical means and electron microscopy, we show that RECQL5 displaces Rad51 from single-stranded DNA (ssDNA) in a reaction that requires ATP hydrolysis and RPA. Together, our results identify RECQL5 as an important tumor suppressor that may act by preventing inappropriate HR events via Rad51 presynaptic filament disruption.