DNA double-strand breaks (DSBs) are the most harmful DNA lesions and their repair is crucial for cell viability and genome integrity. The readout of DSB repair may depend on whether DSBs occur at transcribed versus non-transcribed regions. Some studies have postulated that DNA-RNA hybrids form at DSBs to promote recombinational repair, but others have challenged this notion. To directly assess whether hybrids formed at DSBs promote or interfere with the recombinational repair, we have used plasmid and chromosomal-based systems for the analysis of DSB-induced recombination in Saccharomyces cerevisiae . We show that, as expected, DNA-RNA hybrid formation is stimulated at DSBs. In addition, mutations that promote DNA-RNA hybrid accumulation, such as hpr1∆ and rnh1∆ rnh201∆ , cause high levels of plasmid loss when DNA breaks are induced at sites that are transcribed. Importantly, we show that high levels or unresolved DNA-RNA hybrids at the breaks interfere with their repair by homologous recombination. This interference is observed for both plasmid and chromosomal recombination and is independent of whether the DSB is generated by endonucleolytic cleavage or by DNA replication. These data support a model in which DNA-RNA hybrids form fortuitously at DNA breaks during transcription and need to be removed to allow recombinational repair, rather than playing a positive role.