Chromosomal double-strand breaks (DSBs) in mammalian cells are repaired by either homology-directed repair (HDR), using a homologous sequence as a repair template, or nonhomologous end-joining (NHEJ), which often involves sequence alterations at the DSB site. To characterize the interrelationship of these two pathways, we analyzed HDR of a DSB in cells deficient for NHEJ components. We find that the HDR frequency is enhanced in Ku70(-/-), XRCC4(-/-), and DNA-PKcs(-/-) cells, with the increase being particularly striking in Ku70(-/-) cells. Neither sister-chromatid exchange nor gene-targeting frequencies show a dependence on these NHEJ proteins. A Ku-modulated two-ended versus one-ended chromosome break model is presented to explain these results.