Eukaryotes have evolved complex mechanisms to repair DNA double-strand breaks (DSBs) through coordinated actions of protein sensors, transducers, and effectors. Here we show that ∼21-nucleotide small RNAs are produced from the sequences in the vicinity of DSB sites in Arabidopsis and in human cells. We refer to these as diRNAs for DSB-induced small RNAs. In Arabidopsis, the biogenesis of diRNAs requires the PI3 kinase ATR, RNA polymerase IV (Pol IV), and Dicer-like proteins. Mutations in these proteins as well as in Pol V cause significant reduction in DSB repair efficiency. In Arabidopsis, diRNAs are recruited by Argonaute 2 (AGO2) to mediate DSB repair. Knock down of Dicer or Ago2 in human cells reduces DSB repair. Our findings reveal a conserved function for small RNAs in the DSB repair pathway. We propose that diRNAs may function as guide molecules directing chromatin modifications or the recruitment of protein complexes to DSB sites to facilitate repair.