The DNA damage response (DDR) comprises multiple functions that collectively preserve genomic integrity and suppress tumorigenesis. The Mre11 complex and ATM govern a major axis of the DDR and several lines of evidence implicate that axis in tumor suppression. Components of the Mre11 complex are mutated in approximately five percent of human cancers. Inherited mutations of complex members cause severe chromosome instability syndromes, such as Nijmegen Breakage Syndrome, which is associated with strong predisposition to malignancy. And in mice, Mre11 complex mutations are markedly more susceptible to oncogene- induced carcinogenesis. The complex is integral to all modes of DNA double strand break (DSB) repair and is required for the activation of ATM to effect DNA damage signaling. To understand which functions of the Mre11 complex are important for tumor suppression, we undertook mining of cancer genomic data from the clinical sequencing program at Memorial Sloan Kettering Cancer Center, which includes the Mre11 complex among the 468 genes assessed. Twenty five mutations in MRE11 and RAD50 were modeled in S. cerevisiae and in vitro. The mutations were chosen based on recurrence and conservation between human and yeast. We found that a significant fraction of tumor-borne RAD50 and MRE11 mutations exhibited separation of function phenotypes wherein Tel1/ATM activation was severely impaired while DNA repair functions were mildly or not affected. At the molecular level, the gene products of RAD50 mutations exhibited defects in ATP binding and hydrolysis. The data reflect the importance of Rad50 ATPase activity for Tel1/ATM activation and suggest that inactivation of ATM signaling confers an advantage to burgeoning tumor cells.