While oncogenes promote cancer cell growth, unrestrained proliferation represents a significant stressor to cellular homeostasis networks such as the DNA damage response (DDR). To enable oncogene tolerance, many cancers disable tumor suppressive DDR signaling through genetic loss of DDR pathways and downstream effectors (e.g., ATM or p53 tumor suppressor mutations). Whether and how oncogenes can help "self-tolerize" by creating analogous functional deficiencies in physiologic DDR networks is not known. Here we focus on Ewing sarcoma, a FET fusion oncoprotein (EWS-FLI1) driven pediatric bone tumor, as a model for the class of FET rearranged cancers. Native FET protein family members are among the earliest factors recruited to DNA double-strand breaks (DSBs) during the DDR, though the function of both native FET proteins and FET fusion oncoproteins in DNA repair remains to be defined. Using preclinical mechanistic studies of the DDR and clinical genomic datasets from patient tumors, we discover that the EWS-FLI1 fusion oncoprotein is recruited to DNA DSBs and interferes with native FET (EWS) protein function in activating the DNA damage sensor ATM. As a consequence of FET fusion-mediated interference with the DDR, we establish functional ATM deficiency as the principal DNA repair defect in Ewing sarcoma and the compensatory ATR signaling axis as a collateral dependency and therapeutic target in multiple FET rearranged cancers. More generally, we find that aberrant recruitment of a fusion oncoprotein to sites of DNA damage can disrupt physiologic DSB repair, revealing a mechanism for how growth-promoting oncogenes can also create a functional deficiency within tumor suppressive DDR networks.