The genomic instability associated with adult T cell leukemia/lymphoma (ATL) is causally linked to Tax, the HTLV-1 viral oncoprotein, but the underlying mechanism is not fully understood. We have previously shown that Tax hijacks and aberrantly activates ring finger protein 8 (RNF8) - a lysine 63 (K63)-specific ubiquitin E3 ligase critical for DNA double-strand break (DSB) repair signaling - to assemble K63-linked polyubiquitin chains (K63-pUbs) in the cytosol. Tax and the cytosolic K63-pUbs, in turn, initiate additional recruitment of linear ubiquitin assembly complex (LUBAC) to produce hybrid K63-M1 pUbs, which trigger a kinase cascade that leads to canonical IKK:NF-κB activation. Here we demonstrate that HTLV-1-infected cells are impaired in DNA damage response (DDR). This impairment correlates with the induction of microscopically visible nuclear speckles by Tax known as the Tax-speckle structures (TSS), which act as pseudo DNA damage signaling scaffolds that sequester DDR factors such as BRCA1, DNA-PK, and MDC1. We show that TSS co-localize with Tax, RNF8 and K63-pUbs, and their formation depends on RNF8. Tax mutants defective or attenuated in inducing K63-pUb assembly are deficient or tempered in TSS induction and DDR impairment. Finally, our results indicate that loss of RNF8 expression reduces HTLV-1 viral gene expression and frequently occurs in ATL cells. Thus, during HTLV-1 infection, Tax activates RNF8 to assemble nuclear K63-pUbs that sequester DDR factors in Tax speckles, disrupting DDR signaling and DSB repair. Down-regulation of RNF8 expression is positively selected during infection and progression to disease, and further exacerbates the genomic instability of ATL.