The cellular response to DNA double-strand breaks (DSBs) is initiated by the MRX/MRN complex (Mre11-Rad50-Xrs2 in yeast; Mre11-Rad50-Nbs1 in mammals), which recruits the checkpoint kinase Tel1/ATM to DSBs. In Saccharomyces cerevisiae, the role of Tel1 at DSBs remains enigmatic, as tel1Δ cells do not show obvious hypersensitivity to DSB-inducing agents. By performing a synthetic phenotype screen, we isolated a rad50-V1269M allele that sensitizes tel1Δ cells to genotoxic agents. The MRV1269MX complex associates poorly to DNA ends, and its retention at DSBs is further reduced by the lack of Tel1. As a consequence, tel1Δ rad50-V1269M cells are severely defective both in keeping the DSB ends tethered to each other and in repairing a DSB by either homologous recombination (HR) or nonhomologous end joining (NHEJ). These data indicate that Tel1 promotes MRX retention to DSBs and this function is important to allow proper MRX-DNA binding that is needed for end-tethering and DSB repair. The role of Tel1 in promoting MRX accumulation to DSBs is counteracted by Rif2, which is recruited to DSBs. We also found that Rif2 enhances ATP hydrolysis by MRX and attenuates MRX function in end-tethering, suggesting that Rif2 can regulate MRX activity at DSBs by modulating ATP-dependent conformational changes of Rad50.