Ganciclovir (GCV) is a clinically important drug as it is used to treat viral infections. GCV is incorporated into the DNA during replication, where it interferes with subsequent replication on GCV‐incorporated templates. However, the effects of GCV on the host genome and the mechanisms underlying cellular tolerance to GCV remain unclear. In this study, we explored these mechanisms using a collection of mutant DT40 cells. We identified RAD17/−, BRCA1−/−, and RAD18−/− cells as highly GCV‐sensitive. RAD17, a component of the alternative checkpoint‐clamp loader RAD17‐RFC, was required for the activation of the intra‐S checkpoint following GCV treatment. BRCA1, a critical factor for promoting homologous recombination (HR), was required for suppressing DNA double‐strand breaks (DSBs). Moreover, RAD18, an E3‐ligase involved in DNA repair, was critical in suppressing the aberrant ligation of broken chromosomes caused by GCV. We found that BRCA1 suppresses DSBs through HR‐mediated repair and template switching (TS)‐mediated damage bypass. Moreover, the strong GCV sensitivity of BRCA1−/− cells was rescued by the loss of 53BP1, despite the only partial restoration in the sister chromatid exchange events which are hallmarks of HR. These results indicate that BRCA1 promotes cellular tolerance to GCV through two mechanisms, TS and HR‐mediated repair.