Although tyrosyl-DNA phosphodiesterase (TDP1) is capable of removing blocked 3' termini from DNA double-strand break ends, it is uncertain whether this activity plays a role in double-strand break repair. To address this question, affinity-tagged TDP1 was overexpressed in human cells and purified, and its interactions with end joining proteins were assessed. Ku and DNA-PKcs inhibited TDP1-mediated processing of 3'-phosphoglycolate double-strand break termini, and in the absence of ATP, ends sequestered by Ku plus DNA-PKcs were completely refractory to TDP1. Addition of ATP restored TDP1-mediated end processing, presumably due to DNA-PK-catalyzed phosphorylation. Mutations in the 2609-2647 Ser/Thr phosphorylation cluster of DNA-PKcs only modestly affected such processing, suggesting that phosphorylation at other sites was important for rendering DNA ends accessible to TDP1. In human nuclear extracts, about 30% of PG termini were removed within a few hours despite very high concentrations of Ku and DNA-PKcs. Most such removal was blocked by the DNA-PK inhibitor KU-57788, but approximately 5% of PG termini were removed in the first few minutes of incubation even in extracts preincubated with inhibitor. The results suggest that despite an apparent lack of specific recruitment of TDP1 by DNA-PK, TDP1 can gain access to and can process blocked 3' termini of double-strand breaks before ends are fully sequestered by DNA-PK, as well as at a later stage after DNA-PK autophosphorylation. Following cell treatment with calicheamicin, which specifically induces double-strand breaks with protruding 3'-PG termini, TDP1-mutant SCAN1 (spinocerebellar ataxia with axonal neuropathy) cells exhibited a much higher incidence of dicentric chromosomes, as well as higher incidence of chromosome breaks and micronuclei, than normal cells. This chromosomal hypersensitivity, as well as a small but reproducible enhancement of calicheamicin cytotoxicity following siRNA-mediated TDP1 knockdown, suggests a role for TDP1 in repair of 3'-PG double-strand breaks in vivo.