AbstractR-loops that accumulate at transcription sites pose a persistent threat to genome integrity. PSIP1 is a chromatin protein associated with transcriptional elongation complex, possesses histone chaperone activity, and is implicated in recruiting RNA processing and DNA repair factors to transcription sites. Here, we show that PSIP1 interacts with R-loops and other proteins involved in R-loop homeostasis, including PARP1. Genome-wide mapping of PSIP1, R-loops and γ-H2AX in PSIP1-depleted human and mouse cell lines revealed an accumulation of R-loops and DNA damage at gene promoters in the absence of PSIP1. R-loop accumulation causes local transcriptional arrest and transcription-replication conflict, leading to DNA damage. PSIP1 depletion increases 53BP1 foci and reduces RAD51 foci, suggesting altered DNA repair choice. Furthermore, PSIP1 depletion increases the sensitivity of cancer cells to PARP1 inhibitors and DNA-damaging agents that induce R-loop-induced DNA damage. These findings provide insights into the mechanism through which PSIP1 maintains genome integrity at the site of transcription.