Resolution of DNA double-strand breaks (DSBs) is essential for the suppression of genome instability. DSB repair in transcriptionally active genomic regions represents a unique challenge that is associated with ataxia telangiectasia mutated (ATM) kinase-mediated transcriptional silencing. Despite emerging insights into the underlying mechanisms, how DSB silencing connects to DNA repair remains undefined. We observe that silencing within the rDNA depends on persistent DSBs. Non-homologous end-joining was the predominant mode of DSB repair allowing transcription to resume. ATM-dependent rDNA silencing in the presence of persistent DSBs led to the large-scale reorganization of nucleolar architecture, with movement of damaged chromatin to nucleolar cap regions. These findings identify ATM-dependent temporal and spatial control of DNA repair and provide insights into how communication between DSB signaling and ongoing transcription promotes genome integrity.