Dynamic changes in histone modification are critical for regulating DNA double-strand break (DSB) repair. Activation of the Tip60 acetyltransferase by DSBs requires interaction of Tip60 with histone H3 methylated on lysine 9 (H3K9me3). However, how H3K9 methylation is regulated during DSB repair is not known. Here, we demonstrate that a complex containing kap-1, HP1, and the H3K9 methyltransferase suv39h1 is rapidly loaded onto the chromatin at DSBs. Suv39h1 methylates H3K9, facilitating loading of additional kap-1/HP1/suv39h1 through binding of HP1’s chromodomain to the nascent H3K9me3. This process initiates cycles of kap-1/HP1/suv39h1 loading and H3K9 methylation that facilitate spreading of H3K9me3 and kap-1/HP1/suv39h1 complexes for tens of kilobases away from the DSB. These domains of H3K9me3 function to activate the Tip60 acetyltransferase, allowing Tip60 to acetylate both ataxia telangiectasia-mutated (ATM) kinase and histone H4. Consequently, cells lacking suv39h1 display defective activation of Tip60 and ATM, decreased DSB repair, and increased radiosensitivity. Importantly, activated ATM rapidly phosphorylates kap-1, leading to release of the repressive kap-1/HP1/suv39h1 complex from the chromatin. ATM activation therefore functions as a negative feedback loop to remove repressive suv39h1 complexes at DSBs, which may limit DSB repair. Recruitment of kap-1/HP1/suv39h1 to DSBs therefore provides a mechanism for transiently increasing the levels of H3K9me3 in open chromatin domains that lack H3K9me3 and thereby promoting efficient activation of Tip60 and ATM in these regions. Further, transient formation of repressive chromatin may be critical for stabilizing the damaged chromatin and for remodeling the chromatin to create an efficient template for the DNA repair machinery.