Fanconi anemia (FA) is caused by mutations in 13 Fanc genes and renders cells hypersensitive to DNA interstrand cross-linking (ICL) agents. A central event in the FA pathway is mono-ubiquitylation of the FANCI-FANCD2 (ID) protein complex. Here, we characterize a previously unrecognized nuclease, Fanconi anemia-associated nuclease 1 (FAN1), that promotes ICL repair in a manner strictly dependent on its ability to accumulate at or near sites of DNA damage and that relies on mono-ubiquitylation of the ID complex. Thus, the mono-ubiquitylated ID complex recruits the downstream repair protein FAN1 and facilitates the repair of DNA interstrand cross-links.