DNA double-strand breaks (DSBs) can lead to instability of the genome if not repaired correctly. The MRE11/RAD50/NBS1 (MRN) complex binds DSBs and initiates damage-induced signaling cascades via activation of the ataxia-telangiectasia mutated (ATM) and ataxia-telangiectasia- and rad3-related (ATR) kinases. Mutations throughout MRE11 cause ataxia-telangiectasia-like disorder (ATLD) featuring cerebellar degeneration, and cancer-predisposition in certain kindreds. Here, we have examined the impact on DNA damage signaling of several disease-associated MRE11A alleles to gain greater understanding of the mechanisms underlying the diverse disease sequelae of ATLD. To this end, we have designed a system whereby endogenous wild-type Mre11a is conditionally deleted and disease-associated MRE11 mutants are stably expressed at physiologic levels. We find that mutations in the highly conserved N-terminal domain impact ATM signaling by perturbing both MRE11 interaction with NBS1 and MRE11 homodimerization. In contrast, an inherited allele in the MRE11 C-terminus maintains MRN interactions and ATM/ATR kinase activation. These findings reveal that ATLD patients have reduced ATM activation resulting from at least two distinct mechanisms: (i) N-terminal mutations destabilize MRN interactions, and (ii) mutation of the extreme C-terminus maintains interactions but leads to low levels of the complex. The N-terminal mutations were found in ATLD patients with childhood cancer; thus, our studies suggest a clinically relevant dichotomy in MRE11A alleles. More broadly, these studies underscore the importance of understanding specific effects of hypomorphic disease-associated mutations to achieve accurate prognosis and appropriate long-term medical surveillance.