Cdc48 (also known as p97), a conserved chaperone-like ATPase, plays a strategic role in the ubiquitin system. Empowered by ATP-driven conformational changes, Cdc48 acts as a segregase by dislodging ubiquitylated proteins from their environment. Ufd1, a known co-factor of Cdc48, also binds SUMO (ref. 6), but whether SUMOylated proteins are subject to the segregase activity of Cdc48 as well and what these substrates are remains unknown. Here we show that Cdc48 with its co-factor Ufd1 is SUMO-targeted to proteins involved in DNA double-strand break repair. Cdc48 associates with SUMOylated Rad52, a factor that assembles the Rad51 recombinase on chromatin. By acting on the Rad52-Rad51 complex, Cdc48 curbs their physical interaction and displaces the proteins from DNA. Genetically interfering with SUMO-targeting or segregase activity leads to an increase in spontaneous recombination rates, accompanied by aberrant in vivo Rad51 foci formation in yeast and mammalian cells. Our data thus suggest that SUMO-targeted Cdc48 restricts the recombinase Rad51 by counterbalancing the activity of Rad52. We propose that Cdc48, through its ability to associate with co-factors that have affinities for ubiquitin and SUMO, connects the two modification pathways for protein degradation or other regulatory purposes.