The conserved heterodimeric endonuclease Mus81-Eme1/Mms4 plays an important role in the maintenance of genomic integrity in eukaryotic cells. Here, we show that budding yeast Mus81-Mms4 is strictly regulated during the mitotic cell cycle by Cdc28 (CDK)- and Cdc5 (Polo-like kinase)-dependent phosphorylation of the non-catalytic subunit Mms4. The phosphorylation of this protein occurs only after bulk DNA synthesis and before chromosome segregation, and is absolutely necessary for the function of the Mus81-Mms4 complex. Consistently, a phosphorylation-defective mms4 mutant shows highly reduced nuclease activity and increases the sensitivity of cells lacking the RecQ-helicase Sgs1 to various agents that cause DNA damage or replicative stress. The mode of regulation of Mus81-Mms4 restricts its activity to a short period of the cell cycle, thus preventing its function during chromosome replication and the negative consequences for genome stability derived from its nucleolytic action. Yet, the controlled Mus81-Mms4 activity provides a safeguard mechanism to resolve DNA intermediates that may remain after replication and require processing before mitosis.