Cytotoxic action (tumor cell killing) and carcinogenic side effect (therapy-related secondary leukemia) of etoposide are closely related to its ability in stabilizing topoisomerase II cleavable complex (TOP2cc), a unique form of protein-linked DNA break. How cells process and detect TOP2-concealed DNA damage for the activation of downstream cellular responses remains unclear. Here, we showed proteasomal degradation of both TOP2 isozymes in a transcription-dependent manner upon etoposide treatment. Downregulation of TOP2 was preferentially associated with proteasomal removal of TOP2 in TOP2cc rather than proteolysis of free TOP2. Interestingly, blockage of TOP2 downregulation in TOP2cc also caused reduction in etoposide-induced activation of DNA damage molecules, an observation suggesting that the processing pathways of TOP2cc are involved in activation of etoposide-induced cellular responses. In this regard, we observed two TOP2cc processing pathways, replication- and transcription-initiated processing (RIP and TIP) with proteasome involved in the latter. Importantly, two processing pathways contributed to differential activation of various DNA damage signaling and downstream cellular responses. Etoposide-induced phosphorylation of p53 relied mainly on RIP, whereas activation of Chk1, Chk2 depended largely on TIP. Both RIP and TIP played roles in activating non-homologous end joining pathway, while only RIP modulated etoposide-induced cell killing in a p53-dependent manner. Collectively, our results are consistent with the notion that protein-linked DNA breakage (e.g., TOP2cc) requires processing pathways for initiating downstream DNA damage detection, repair as well as cell death programs.