Mutation of BRCA2 causes familial early onset breast and ovarian cancer. BRCA2 has been suggested to be important for the maintenance of genome integrity and to have a role in DNA repair by homology-directed double-strand break (DSB) repair. By studying the repair of a specific induced chromosomal DSB we show that loss of Brca2 leads to a substantial increase in error-prone repair by homology-directed single-strand annealing and a reduction in DSB repair by conservative gene conversion. These data demonstrate that loss of Brca2 causes misrepair of chromosomal DSBs occurring between repeated sequences by stimulating use of an error-prone homologous recombination pathway. Furthermore, loss of Brca2 causes a large increase in genome-wide error-prone repair of both spontaneous DNA damage and mitomycin C-induced DNA cross-links at the expense of error-free repair by sister chromatid recombination. This provides insight into the mechanisms that induce genome instability in tumour cells lacking BRCA2.