5-Fluorouracil (5-FU), a chemotherapeutic drug commonly used in cancer treatment, imbalances nucleotide pools, thereby favoring misincorporation of uracil and 5-FU into genomic DNA. The processing of these bases by DNA repair activities was proposed to cause DNA-directed cytotoxicity, but the underlying mechanisms have not been resolved. In this study, we investigated a possible role of thymine DNA glycosylase (TDG), one of four mammalian uracil DNA glycosylases (UDGs), in the cellular response to 5-FU. Using genetic and biochemical tools, we found that inactivation of TDG significantly increases resistance of both mouse and human cancer cells towards 5-FU. We show that excision of DNA-incorporated 5-FU by TDG generates persistent DNA strand breaks, delays S-phase progression, and activates DNA damage signaling, and that the repair of 5-FU-induced DNA strand breaks is more efficient in the absence of TDG. Hence, excision of 5-FU by TDG, but not by other UDGs (UNG2 and SMUG1), prevents efficient downstream processing of the repair intermediate, thereby mediating DNA-directed cytotoxicity. The status of TDG expression in a cancer is therefore likely to determine its response to 5-FU-based chemotherapy.