Rad54 and Mus81 mammalian proteins physically interact and are important for the homologous recombination DNA repair pathway; however, their functional interactions in vivo are poorly defined. Here, we show that combinatorial loss of Rad54 and Mus81 results in hypersensitivity to DNA-damaging agents, defects on both the homologous recombination and non-homologous DNA end joining repair pathways and reduced fertility. We also observed that while Mus81 deficiency diminished the cleavage of common fragile sites, very strikingly, Rad54 loss impaired this cleavage to even a greater extent. The inefficient repair of DNA double-strand breaks (DSBs) in Rad54-/-Mus81-/- cells was accompanied by elevated levels of chromosome missegregation and cell death. Perhaps as a consequence, tumor incidence in Rad54-/-Mus81-/- mice remained comparable to that in Mus81-/- mice. Our study highlights the importance of the cooperation between Rad54 and Mus81 for mediating DNA DSB repair and restraining chromosome missegregation.