Strong connections exist between R-loops (three-stranded structures harbouring an RNA:DNA hybrid and a displaced single-strand DNA), genome instability and human disease. Indeed, R-loops are favoured in relevant genomic regions as regulators of certain physiological processes through which homeostasis is typically maintained. For example, transcription termination pause sites regulated by R-loops can induce the synthesis of antisense transcripts that enable the formation of local, RNA interference (RNAi)-driven heterochromation. Pause sites are also protected against endogenous single-stranded DNA breaks by BRCA1. Hypotheses about how DNA repair is enacted at pause sites include a role for RNA, which is emerging as a normal, albeit unexplained, regulator of genome integrity. Here we report that a species of single-stranded, DNA-damage-associated small RNA (sdRNA) is generated by a BRCA1-RNAi protein complex. sdRNAs promote DNA repair driven by the PALB2-RAD52 complex at transcriptional termination pause sites that form R-loops and are rich in single-stranded DNA breaks. sdRNA repair operates in both quiescent (G0) and proliferating cells. Thus, sdRNA repair can occur in intact tissue and/or stem cells, and may contribute to tumour suppression mediated by BRCA1.