The response of eukaryotic cells to double-strand breaks in genomic DNA includes the sequestration of many factors into nuclear foci. Recently it has been reported that a member of the histone H2A family, H2AX, becomes extensively phosphorylated within 1-3 minutes of DNA damage and forms foci at break sites. In this work, we examine the role of H2AX phosphorylation in focus formation by several repair-related complexes, and investigate what factors may be involved in initiating this response. Using two different methods to create DNA double-strand breaks in human cells, we found that the repair factors Rad50 and Rad51 each colocalized with phosphorylated H2AX (gamma-H2AX) foci after DNA damage. The product of the tumor suppressor gene BRCA1 also colocalized with gamma-H2AX and was recruited to these sites before Rad50 or Rad51. Exposure of cells to the fungal inhibitor wortmannin eliminated focus formation by all repair factors examined, suggesting a role for the phosphoinositide (PI)-3 family of protein kinases in mediating this response. Wortmannin treatment was effective only when it was added early enough to prevent gamma-H2AX formation, indicating that gamma-H2AX is necessary for the recruitment of other factors to the sites of DNA damage. DNA repair-deficient cells exhibit a substantially reduced ability to increase the phosphorylation of H2AX in response to ionizing radiation, consistent with a role for gamma-H2AX in DNA repair. The pattern of gamma-H2AX foci that is established within a few minutes of DNA damage accounts for the patterns of Rad50, Rad51, and Brca1 foci seen much later during recovery from damage. The evidence presented strongly supports a role for the gamma-H2AX and the PI-3 protein kinase family in focus formation at sites of double-strand breaks and suggests the possibility of a change in chromatin structure accompanying double-strand break repair.