Ataxia-telangiectasia mutated (ATM) plays a central role in the cellular response to DNA damage and ATM alterations are common in several tumor types including bladder cancer. However, the specific impact of ATM alterations on therapy response in bladder cancer is uncertain. Here, we combine preclinical modeling and clinical analyses to comprehensively define the impact of ATM alterations on bladder cancer. We show that ATM loss is sufficient to increase sensitivity to DNA-damaging agents including cisplatin and radiation. Furthermore, ATM loss drives sensitivity to DNA repair–targeted agents including poly(ADP-ribose) polymerase (PARP) and Ataxia telangiectasia and Rad3 related (ATR) inhibitors. ATM loss alters the immune microenvironment and improves anti-PD1 response in preclinical bladder models but is not associated with improved anti-PD1/PD-L1 response in clinical cohorts. Last, we show that ATM expression by immunohistochemistry is strongly correlated with response to chemoradiotherapy. Together, these data define a potential role for ATM as a predictive biomarker in bladder cancer.