The molecular events occurring following the disruption of DNA replication forks are poorly characterized, despite extensive use of replication inhibitors such as hydroxyurea in the treatment of malignancies. Here, we identify a key role for the FBH1 helicase in mediating DNA double-strand break formation following replication inhibition. We show that FBH1-deficient cells are resistant to killing by hydroxyurea, and exhibit impaired activation of the pro-apoptotic factor p53, consistent with decreased DNA double-strand break formation. Similar findings were obtained in murine ES cells carrying disrupted alleles of Fbh1. We also show that FBH1 through its helicase activity co-operates with the MUS81 nuclease in promoting the endonucleolytic DNA cleavage following prolonged replication stress. Accordingly, MUS81 and EME1-depleted cells show increased resistance to the cytotoxic effects of replication stress. Our data suggest that FBH1 helicase activity is required to eliminate cells with excessive replication stress through the generation of MUS81-induced DNA double-strand breaks.