Genome integrity is safeguarded by the DNA damage response (DDR). Transcriptional modulation of genes around DNA double-strand breaks (DSBs) is important for DNA repair. It has been shown that DSBs repress transcription of DSB-bearing genes in an ATM- and PRC1-dependent manner. However, DSB also induce local de novo transcription of non-coding RNA, which are processed by DROSHA and DICER into small DNA-damage-response RNA (DDRNA). Here we reconcile these apparently contrasting observations by showing that DROSHA and DICER inactivation prevents transcriptional repression of DSB-bearing genes by reducing PRC1 recruitment to DSB and consequent H2A-K119 chromatin ubiquitination. Indeed, DDRNAs generated at DSB associate with the PRC1 component BMI1 and inhibition of DDRNA function with antisense oligonucleotides is sufficient to reduce damage-induce transcriptional silencing in cis genes (DISC). We propose that DROSHA, DICER and DDRNAs control DISC at genomic lesion sites by favoring PRC1-driven chromatin ubiquitination.