The human Mre11/Rad50/Nbs1 (hMRN) complex is critical for the sensing, processing, and signaling of DNA double-strand breaks. The nuclease activity of Mre11 is essential for mammalian development and cell viability, although the regulation and substrate specificity of Mre11 have been difficult to define. Here we show that hMRN catalyzes sequential endonucleolytic and exonucleolytic activities on both 5' and 3' strands of DNA ends containing protein adducts, and that Nbs1, ATP, and adducts are essential for this function. In contrast, Nbs1 inhibits Mre11/Rad50-catalyzed 3'-to-5' exonucleolytic degradation of clean DNA ends. The hMRN endonucleolytic cleavage events are further stimulated by the phosphorylated form of the human C-terminal binding protein-interacting protein (CtIP) DNA repair enzyme, establishing a role for CtIP in regulating hMRN activity. These results illuminate the important role of Nbs1 and CtIP in determining the substrates and consequences of human Mre11/Rad50 nuclease activities on protein-DNA lesions.