Unrepaired DNA double-strand breaks can lead to apoptosis or tumorigenesis. In mammals double-strand breaks are repaired mainly by nonhomologous end-joining mediated by the DNA-PK complex. The core protein of this complex, DNA-PKcs, is a DNA-dependent serine/threonine kinase that phosphorylates protein targets as well as itself. Although the (auto)phosphorylation activity has been shown to be essential for repair of both random double-strand breaks and induced breaks at the immunoglobulin locus, the corresponding phosphatase has been elusive. In fact, to date, none of the putative phosphatases in DNA double-strand break repair has been identified. Here we show that protein phosphatase 5 interacts with DNA-PKcs and dephosphorylates with surprising specificity at least two functional sites. Cells with either hypo- or hyperphosphorylation of DNA-PKcs at these sites show increased radiation sensitivity.