Xbp1 has been shown to regulate the cell cycle as a transcriptional repressor in budding yeast Saccharomyces cerevisiae. In this study, we demonstrated that Xbp1 regulates DNA double-strand break (DSB) repair in S. cerevisiae. Xbp1 physically and genetically interacts with the histone deacetylase Rpd3 complex. Chromatin immunoprecipitation revealed that Xbp1 is required for efficient deacetylation of histone H4 flanking DSBs by the Rpd3 complex. Deletion of XBP1 leads to the delayed deacetylation of histone H4, which is coupled with increased nucleosome displacement, increased DNA end resection and decreased non-homologous end-joining (NHEJ). In response to DNA damage, Xbp1 is upregulated in a Mec1-Rad9-Rad53 checkpoint pathway-dependent manner and undergoes dephosphorylation. Cdk1, a central regulator of S. cerevisiae cell cycle, is responsible for Xbp1 phosphorylation at residues Ser146, Ser271 and Ser551. Substitution of these serine residues with alanine not only increases the association of Xbp1 with the Rpd3 complex and its recruitment to a DSB, but also promotes DSB repair. Together, our findings reveal a role for Xbp1 in DSB repair via NHEJ through regulation of histone H4 acetylation and nucleosome displacement in a positive feedback manner.