DNA damage activates the ATM and ATR kinases that coordinate checkpoint and DNA repair pathways. An essential step in homology-directed repair (HDR) of DNA breaks is the formation of RAD51 nucleofilaments mediated by PALB2-BRCA2; however, roles of ATM and ATR in this critical step of HDR are poorly understood. Here, we show that PALB2 is markedly phosphorylated in response to genotoxic stresses such as ionizing radiation and hydroxyurea. This response is mediated by the ATM and ATR kinases through three N-terminal S/Q-sites in PALB2, the consensus target sites for ATM and ATR Importantly, a phospho-deficient PALB2 mutant is unable to support proper RAD51 foci formation, a key PALB2 regulated repair event, whereas a phospho-mimicking PALB2 version supports RAD51 foci formation. Moreover, phospho-deficient PALB2 is less potent in HDR than wild-type PALB2. Further, this mutation reveals a separation in PALB2 function, as the PALB2-dependent checkpoint response is normal in cells expressing the phospho-deficient PALB2 mutant. Collectively, our findings highlight a critical importance of PALB2 phosphorylation as a novel regulatory step in genome maintenance after genotoxic stress.