Significance Spinocerebellar ataxia type 3 (SCA3) is a neurodegenerative disease with no effective treatments. SCA3 is etiologically linked to an abnormal polyglutamine (polyQ) tract at the C terminus of Ataxin-3 (ATXN3). How this polyQ stretch causes SCA3 pathology remains elusive. Here we provide evidence that wild-type ATXN3 plays an important role in error-free repair of DNA double-strand breaks in the transcribed genes. In contrast, mutant ATXN3 blocks the activity of a DNA end-processing enzyme, polynucleotide kinase 3′-phosphatase (PNKP), leading to progressive accumulation of double-strand breaks and abrogation of global transcription. Since PNKP overexpression in Drosophila rescued the SCA3 phenotype, this promising therapeutic avenue for SCA3 is worth exploring.