Fanconi anemia (FA) is a complex cancer susceptibility disorder associated with DNA repair defects and infertility, yet the precise function of the FA proteins in genome maintenance remains unclear. Here we report that C. elegans FANCD2 (fcd-2) is dispensable for normal meiotic recombination but is required in crossover defective mutants to prevent illegitimate repair of meiotic breaks by nonhomologous end joining (NHEJ). In mitotic cells, we show that DNA repair defects of C. elegans fcd-2 mutants and FA-deficient human cells are significantly suppressed by eliminating NHEJ. Moreover, NHEJ factors are inappropriately recruited to sites of replication stress in the absence of FANCD2. Our findings are consistent with the interpretation that FA results from the promiscuous action of NHEJ during DNA repair. We propose that a critical function of the FA pathway is to channel lesions into accurate, as opposed to error-prone, repair pathways.