The promyelocytic leukemia protein (PML) is a tumor suppressor critical for formation of nuclear bodies (NBs) performing important functions in transcription, apoptosis, DNA repair and antiviral responses. Earlier studies demonstrated that simian virus 40 (SV40) initiates replication near PML NBs. Here we show that PML knockdown inhibits viral replication in vivo, thus indicating a positive role of PML early in infection. SV40 large T antigen (LT) induces DNA damage and, consequently, nuclear foci of the key homologous recombination repair protein Rad51 that colocalize with PML. PML depletion abrogates LT-induced Rad51 foci. LT may target PML NBs to gain access to DNA repair factors like Rad51 that are required for viral replication. We have used the SV40 model to gain insight to DNA repair events involving PML. Strikingly, even in normal cells devoid of viral oncoproteins, PML is found to be instrumental for foci of Rad51, Mre11 and BRCA1, as well as homology-directed repair after double-strand break (DSB) induction. Following LT expression or external DNA damage, PML associates with Rad51. PML depletion also causes a loss of RPA foci following γ-irradiation, suggesting that PML is required for processing of DSBs. Immunofluorescent detection of incorporated BrdU without prior denaturation indicates a failure to generate ssDNA foci in PML knockdown cells upon γ-irradiation. Consistent with the lack of RPA and BrdU foci, γ-irradiation fails to induce Chk1 activation, when PML is depleted. Taken together, we have discovered a novel functional connection between PML and the homologous recombination-mediated repair machinery, which might contribute to PML tumor suppressor activity.