The Ku heterodimer (Ku70/Ku80) is the central DNA binding component of the classical non-homologous end joining (NHEJ) pathway that repairs DNA double-stranded breaks (DSBs), serving as the scaffold for the formation of the NHEJ complex. Here we show that Ku70 is phosphorylated on Serine 155 in response to DNA damage. Expression of Ku70 bearing a S155 phosphomimetic substitution (Ku70 S155D) in Ku70-deficient mouse embryonic fibroblasts (MEFs) triggered cell cycle arrest at multiple checkpoints and altered expression of several cell cycle regulators in absence of DNA damage. Cells expressing Ku70 S155D exhibited a constitutive DNA damage response, including ATM activation, H2AX phosphorylation and 53BP1 foci formation. Ku70 S155D was found to interact with Aurora B and to have an inhibitory effect on Aurora B kinase activity. Lastly, we demonstrate that Ku and Aurora B interact following ionizing radiation treatment and that Aurora B inhibition in response to DNA damage is dependent upon Ku70 S155 phosphorylation. This uncovers a new pathway where Ku may relay signaling to Aurora B to enforce cell cycle arrest in response to DNA damage.