The DSS1 protein interacts with the breast cancer susceptibility protein BRCA2 that plays an integral role in the repair of DNA double-strand breaks (DSBs). DSS1 has also been shown to interact with components of the 26S proteasome in Saccharomyces cerevisiae and in human tumour cells. This raises the possibility of functional interplay between the DNA repair machinery and the proteasome. We show here that human DSS1 interacts with the RPN3 and RPN7 proteasome subunits and define regions of DSS1 important for the interactions with RPN3, RPN7 and BRCA2. We also show that BRCA2 interacts with RPN3 and RPN7 and that the BRCA2/RPN7 interaction is independent of DSS1. Finally, and most significantly, we demonstrate that the proteolytic activity of the proteasome is a determinant of the choice of DSB repair pathway; inhibition of proteasome proteolytic activity results in an increase in the utilization of potentially mutagenic single-strand annealing at the expense of a reduction in the level of error-free gene conversion. This confirms a functional link between DSB repair and proteasomal activity.