The DNA damage response encompasses a complex series of signaling pathways that function to regulate and facilitate the repair of damaged DNA. Recent studies have shown that the repair of transcriptionally inactive chromatin, named heterochromatin, is dependent upon the phosphorylation of the co-repressor, Krüppel-associated box (KRAB) domain-associated protein (KAP-1), by the ataxia telangiectasia-mutated (ATM) kinase. Co-repressors, such as KAP-1, function to regulate the rigid structure of heterochromatin by recruiting histone-modifying enzymes, such HDAC1/2, SETDB1, and nucleosome-remodeling complexes such as CHD3. Here, we have characterized a phosphorylation site in the HP1-binding domain of KAP-1, Ser-473, which is phosphorylated by the cell cycle checkpoint kinase Chk2. Expression of a nonphosphorylatable S473A mutant conferred cellular sensitivity to DNA-damaging agents and led to defective repair of DNA double-strand breaks in heterochromatin. In addition, cells expressing S473A also displayed defective mobilization of the HP1-β chromodomain protein. The DNA repair defect observed in cells expressing S473A was alleviated by depletion of HP1-β, suggesting that phosphorylation of KAP-1 on Ser-473 promotes the mobilization of HP1-β from heterochromatin and subsequent DNA repair. These results suggest a novel mechanism of KAP-1-mediated chromatin restructuring via Chk2-regulated HP1-β exchange from heterochromatin, promoting DNA repair.