It was recently shown that the 5’ to 3’ exoribonuclease XRN2 is involved in the DNA damage response. Importantly, loss of XRN2 abrogates DNA double stranded break repair via the non-homologous end-joining pathway. However, the mechanistic details of how XRN2 functions in the non-homologous end-joining repair process are unknown. In this study, we elucidated that XRN2-mediated RNA:DNA hybrid resolution is required to allow Ku70 binding to DNA ends. These data suggest that XRN2 is required for the initiation of non-homologous end-joining repair. Interestingly, we uncovered a role for XRN2 in the homologous recombination repair pathway. Loss of XRN2 lead to a decrease in the repair of double strand breaks by homologous recombination. Strikingly, when we removed RNA:DNA hybrids by RNaseH1 over-expression, homologous recombination was not restored. We found RNA:DNA hybrid formation at and downstream of the DSB site, suggesting that unregulated transcription inhibits homologous recombination repair. In summary, our results indicate a relation between RNA:DNA hybrid resolution and double strand break repair pathway choice.