The post-translational modification of DNA repair and checkpoint proteins by ubiquitin and small ubiquitin-like modifier (SUMO) critically orchestrates the DNA damage response (DDR). The ubiquitin ligase RNF4 integrates signaling by SUMO and ubiquitin, through its selective recognition and ubiquitination of SUMO-modified proteins. Here, we define a key new determinant for target discrimination by RNF4, in addition to interaction with SUMO. We identify a nucleosome-targeting motif within the RNF4 RING domain that can bind DNA and thereby enables RNF4 to selectively ubiquitinate nucleosomal histones. Furthermore, RNF4 nucleosome-targeting is crucially required for the repair of TRF2-depleted dysfunctional telomeres by 53BP1-mediated non-homologous end joining.