Homologous recombination (HR) and Fanconi Anemia (FA) pathway proteins in addition to their DNA repair functions, limit nuclease-mediated processing of stalled replication forks. However, the mechanism by which replication fork degradation results in genome instability is poorly understood. Here, we identify RIF1, a non-homologous end joining (NHEJ) factor, to be enriched at stalled replication forks. Rif1 knockout cells are proficient for recombination, but displayed degradation of reversed forks, which depends on DNA2 nuclease activity. Notably, RIF1-mediated protection of replication forks is independent of its function in NHEJ, but depends on its interaction with Protein Phosphatase 1. RIF1 deficiency delays fork restart and results in exposure of under-replicated DNA, which is the precursor of subsequent genomic instability. Our data implicate RIF1 to be an essential factor for replication fork protection, and uncover the mechanisms by which unprotected DNA replication forks can lead to genome instability in recombination-proficient conditions.