BRCA1 encodes a familial breast cancer suppressor that has a critical role in cellular responses to DNA damage. Mouse cells deficient for Brca1 show genetic instability, defective G2-M checkpoint control and reduced homologous recombination. BRCA1 also directly interacts with proteins of the DNA repair machinery and regulates expression of both the p21 and GADD45 genes. However, it remains unclear how DNA damage signals are transmitted to modulate the repair function of BRCA1. Here we show that the BRCA1-associated protein CtIP becomes hyperphosphorylated and dissociated from BRCA1 upon ionizing radiation. This phosphorylation event requires the protein kinase (ATM) that is mutated in the disease ataxia telangiectasia. ATM phosphorylates CtIP at serine residues 664 and 745, and mutation of these sites to alanine abrogates the dissociation of BRCA1 from CtIP, resulting in persistent repression of BRCA1-dependent induction of GADD45 upon ionizing radiation. We conclude that ATM, by phosphorylating CtIP upon ionizing radiation, may modulate BRCA1-mediated regulation of the DNA damage-response GADD45 gene, thus providing a potential link between ATM deficiency and breast cancer.