Defective signaling or repair of DNA double-strand breaks has been associated with developmental defects and human diseases. The E3 ligase RING finger 168 (RNF168), mutated in the human radiosensitivity, immunodeficiency, dysmorphic features, and learning difficulties syndrome, was shown to ubiquitylate H2A-type histones, and this ubiquitylation was proposed to facilitate the recruitment of p53-binding protein 1 (53BP1) to the sites of DNA double-strand breaks. In contrast to more upstream proteins signaling DNA double-strand breaks (e.g., RNF8), deficiency of RNF168 fully prevents both the initial recruitment to and retention of 53BP1 at sites of DNA damage; however, the mechanism for this difference has remained unclear. Here, we identify mechanisms that regulate 53BP1 recruitment to the sites of DNA double-strand breaks and provide evidence that RNF168 plays a central role in the regulation of 53BP1 functions. RNF168 mediates K63-linked ubiquitylation of 53BP1 which is required for the initial recruitment of 53BP1 to sites of DNA double-strand breaks and for its function in DNA damage repair, checkpoint activation, and genomic integrity. Our findings highlight the multistep roles of RNF168 in signaling DNA damage.