The RecQL5 helicase is essential for maintaining genome stability and reducing cancer risk. To elucidate its mechanism of action, we purified a RecQL5-associated complex and identified its major component as RNA polymerase II (Pol II). Bioinformatics and structural modeling-guided mutagenesis revealed two conserved regions in RecQL5 as KIX and SRI domains, already known in transcriptional regulators for Pol II. The RecQL5-KIX domain binds both initiation (Pol IIa) and elongation (Pol IIo) forms of the polymerase, whereas the RecQL5-SRI domain interacts only with the elongation form. Fully functional RecQL5 requires both helicase activity and associations with the initiation polymerase, because mutants lacking either activity are partially defective in the suppression of sister chromatid exchange and resistance to camptothecin-induced DNA damage, and mutants lacking both activities are completely defective. We propose that RecQL5 promotes genome stabilization through two parallel mechanisms: by participation in homologous recombination-dependent DNA repair as a RecQ helicase and by regulating the initiation of Pol II to reduce transcription-associated replication impairment and recombination.