In response to cellular genome breaks, MRE11/RAD50/NBS1 (MRN) activates a global ATM DNA damage response (DDR) that prevents cellular replication. Here, we show that MRN-ATM also has critical functions in defending the cell against DNA viruses. We reveal temporally distinct responses to adenovirus genomes: a critical MRN-ATM DDR that must be inactivated by E1B-55K/E4-ORF3 viral oncoproteins and a global MRN-independent ATM DDR to viral nuclear domains that does not impact viral replication. We show that MRN binds to adenovirus genomes and activates a localized ATM response that specifically prevents viral DNA replication. In contrast to chromosomal breaks, ATM activation is not amplified by H2AX across megabases of chromatin to induce global signaling and replicative arrest. Thus, γH2AX foci discriminate "self" and "non-self" genomes and determine whether a localized anti-viral or global ATM response is appropriate. This provides an elegant mechanism to neutralize viral genomes without jeopardizing cellular viability.