The Mre11 complex is a central component of the DNA damage response, with roles in damage sensing, molecular bridging, and end resection. We have previously shown that in Saccharomyces cerevisiae, Ku70 (yKu70) deficiency reduces the ionizing radiation sensitivity of mre11Δ mutants. In this study, we show that yKu70 deficiency suppressed the camptothecin (CPT) and methyl methanesulfonate (MMS) sensitivity of nuclease-deficient mre11-3 and sae2Δ mutants in an Exo1-dependent manner. CPT-induced G(2)/M arrest, γ-H2AX persistence, and chromosome breaks were elevated in mre11-3 mutants. These outcomes were reduced by yKu70 deficiency. Given that the genotoxic effects of CPT are manifest during DNA replication, these data suggest that Ku limits Exo1-dependent double-strand break (DSB) resection during DNA replication, inhibiting the initial processing steps required for homology-directed repair. We propose that Mre11 nuclease- and Sae2-dependent DNA end processing, which initiates DSB resection prevents Ku from engaging DSBs, thus promoting Exo1-dependent resection. In agreement with this idea, we show that Ku affinity for binding to short single-stranded overhangs is much lower than for blunt DNA ends. Collectively, the data define a nonhomologous end joining (NHEJ)-independent, S-phase-specific function of the Ku heterodimer.