Abstract Background Genomic instability promotes evolution and heterogeneity of tumors. Unraveling its mechanistic basis is essential for the design of appropriate therapeutic strategies. In a previous study, we reported an unexpected oncogenic property of p21^WAF1/Cip1, showing that its chronic expression in a p53-deficient environment causes genomic instability by deregulation of the replication licensing machinery. Results We now demonstrate that p21^WAF1/Cip1 can further fuel genomic instability by suppressing the repair capacity of low- and high-fidelity pathways that deal with nucleotide abnormalities. Consequently, fewer single nucleotide substitutions (SNSs) occur, while formation of highly deleterious DNA double-strand breaks (DSBs) is enhanced, crafting a characteristic mutational signature landscape. Guided by the mutational signatures formed, we find that the DSBs are repaired by Rad52-dependent break-induced replication (BIR) and single-strand annealing (SSA) repair pathways. Conversely, the error-free synthesis-dependent strand annealing (SDSA) repair route is deficient. Surprisingly, Rad52 is activated transcriptionally in an E2F1-dependent manner, rather than post-translationally as is common for DNA repair factor activation. Conclusions Our results signify the importance of mutational signatures as guides to disclose the repair history leading to genomic instability. We unveil how chronic p21^WAF1/Cip1 expression rewires the repair process and identifies Rad52 as a source of genomic instability and a candidate therapeutic target.