Mitotic cells inactivate DNA double-strand break (DSB) repair, but the rationale behind this suppression remains unknown. Here, we unravel how mitosis blocks DSB repair and determine the consequences of repair reactivation. Mitotic kinases phosphorylate the E3 ubiquitin ligase RNF8 and the nonhomologous end joining factor 53BP1 to inhibit their recruitment to DSB-flanking chromatin. Restoration of RNF8 and 53BP1 accumulation at mitotic DSB sites activates DNA repair but is, paradoxically, deleterious. Aberrantly controlled mitotic DSB repair leads to Aurora B kinase-dependent sister telomere fusions that produce dicentric chromosomes and aneuploidy, especially in the presence of exogenous genotoxic stress. We conclude that the capacity of mitotic DSB repair to destabilize the genome explains the necessity for its suppression during mitosis, principally due to the fusogenic potential of mitotic telomeres.