The SMC5/6 protein complex consists of the Smc5, Smc6 and Non-Smc-Element (Nse) proteins and is important for genome stability in many species. To identify novel components in the DNA repair pathway, we carried out a genetic screen to identify mutations that confer reduced resistance to the genotoxic effects of caffeine, which inhibits the ATM and ATR DNA damage response proteins. This approach identified inactivating mutations in CG5524 and MAGE, homologs of genes encoding Smc6 and Nse3 in yeasts. The fact that Smc5 mutants are also caffeine-sensitive and that Mage physically interacts with Drosophila homologs of Nse proteins suggests that the structure of the Smc5/6 complex is conserved in Drosophila. Although Smc5/6 proteins are required for viability in S. cerevisiae, they are not essential under normal circumstances in Drosophila. However, flies carrying mutations in Smc5, Smc6 and MAGE are hypersensitive to genotoxic agents such as ionizing radiation, camptothecin, hydroxyurea and MMS, consistent with the Smc5/6 complex serving a conserved role in genome stability. We also show that mutant flies are not compromised for pre-mitotic cell cycle checkpoint responses. Rather, caffeine-induced apoptosis in these mutants is exacerbated by inhibition of ATM or ATR checkpoint kinases but suppressed by Rad51 depletion, suggesting a functional interaction involving homologous DNA repair pathways that deserves further scrutiny. Our insights into the SMC5/6 complex provide new challenges for understanding the role of this enigmatic chromatin factor in multi-cellular organisms.