Double-strand breaks (DSBs) threaten genomic stability and need immediate attention from DNA damage response (DDR) machinery involved in homologous recombination (HR) or nonhomologous end joining (NHEJ). DDR in heterochromatin is challenging owing to the distinct chromatin organization. Heterochromatin protein 1 (HP1) isoforms are central to heterochromatin structure and have been implicated in DDR. Mammalian HP1 has three isoforms, HP1α, HP1β, and HP1γ, which possess significant homology and yet have distinct functions. HP1α is the only isoform known to undergo liquid–liquid phase separation mediated by phosphorylation on the N-terminal extension (NTE). We show that the minute-scale dynamics of HP1α and HP1β differ dramatically and differentially influence the recruitment of HR vs. NHEJ factors at sites of laser-induced clustered DSBs. Perturbing HP1α phosphorylation impairs HR factor recruitment and reduces HR efficiency. Our study provides a potential link between phase separation and DDR-centric roles of HP1α and hints at spatial partitioning of repair pathways in response to damage in heterochromatin.

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