Summary During DNA double strand break (DSB) repair, the ring-shaped Ku70/80 complex becomes trapped on DNA and needs to be actively extracted, but it has remained unclear what provides the required energy. By means of reconstitution of DSB repair on beads, we demonstrate here that DNA-locked Ku rings are released by the AAA-ATPase, p97. To achieve this, p97 requires ATP hydrolysis, cooperates with the Ufd1-Npl4 ubiquitin adapter complex and specifically targets Ku80 that is modified by K48-linked ubiquitin chains. In U2OS cells, chemical inhibition of p97, or siRNA-mediated depletion of p97 or its adapters impairs Ku80 removal after non-homologous end-joining of DSBs. Moreover, it attenuates early steps in homologous recombination consistent with p97-driven Ku release also affecting repair pathway choice. Thus, our data solve a central question regarding regulation of Ku in DSB repair, and illustrate the ability of p97 to segregate even tightly bound protein complexes for release from DNA.