JC polyomavirus (JCV), which infects 90% of the human population, is detectable in human tumors. Its early protein, JCV T-antigen, transforms cells in vitro and is tumorigenic in experimental animals. Although T-antigen-mediated transformation involves genetic alterations of the affected cells, the mechanism underlying this genomic instability is not known. We show that JCV T-antigen inhibits homologous recombination DNA repair (HRR), which results in an accumulation of mutations. T-antigen does not operate directly but utilizes a cytosolic molecule, insulin receptor substrate 1 (IRS-1). Following T-antigen-mediated nuclear translocation, IRS-1 binds Rad51 at the site of damaged DNA. This T-antigen-mediated inhibition of HRR does not function in cells lacking IRS-1, and can be reproduced in the absence of T-antigen by IRS-1 with artificial nuclear localization signal. Our observations define a new mechanism by which viral protein utilizes cytosolic molecule to inhibit faithful DNA repair, and suggest how polyomaviruses could compromise stability of the genome. © 2005 Wiley-Liss, Inc.