Appropriate DNA double-strand break (DSB) repair factor choice is essential for ensuring accurate repair outcome and genomic integrity. The factors that regulate this process remain poorly understood. Here, we identify two repressive chromatin components, the macrohistone variant macroH2A1 and the H3K9 methyltransferase and tumor suppressor PRDM2, which together direct the choice between the antagonistic DSB repair mediators BRCA1 and 53BP1. The macroH2A1/PRDM2 module mediates an unexpected shift from accessible to condensed chromatin that requires the ataxia telangiectasia mutated (ATM)-dependent accumulation of both proteins at DSBs in order to promote DSB-flanking H3K9 dimethylation. Remarkably, loss of macroH2A1 or PRDM2, as well as experimentally induced chromatin decondensation, impairs the retention of BRCA1, but not 53BP1, at DSBs. As a result, macroH2A1 and/or PRDM2 depletion causes epistatic defects in DSB end resection, homology-directed repair, and the resistance to poly(ADP-ribose) polymerase (PARP) inhibition—all hallmarks of BRCA1-deficient tumors. Together, these findings identify dynamic, DSB-associated chromatin reorganization as a critical modulator of BRCA1-dependent genome maintenance.