RAD51C, a RAD51 paralog, has been implicated in homologous recombination (HR), and germ line mutations in RAD51C are known to cause Fanconi anemia (FA)-like disorder and breast and ovarian cancers. The role of RAD51C in the FA pathway of DNA interstrand cross-link (ICL) repair and as a tumor suppressor is obscure. Here, we report that RAD51C deficiency leads to ICL sensitivity, chromatid-type errors, and G(2)/M accumulation, which are hallmarks of the FA phenotype. We find that RAD51C is dispensable for ICL unhooking and FANCD2 monoubiquitination but is essential for HR, confirming the downstream role of RAD51C in ICL repair. Furthermore, we demonstrate that RAD51C plays a vital role in the HR-mediated repair of DNA lesions associated with replication. Finally, we show that RAD51C participates in ICL and double strand break-induced DNA damage signaling and controls intra-S-phase checkpoint through CHK2 activation. Our analyses with pathological mutants of RAD51C that were identified in FA and breast and ovarian cancers reveal that RAD51C regulates HR and DNA damage signaling distinctly. Together, these results unravel the critical role of RAD51C in the FA pathway of ICL repair and as a tumor suppressor.