The ataxia-telangiectasia mutated and rad3-related (ATR) kinase orchestrates cellular responses to DNA damage and replication stress. Complete loss of ATR function leads to chromosomal instability and cell death. However, heterozygous ATR mutations are found in human cancers with microsatellite instability, suggesting that ATR haploinsufficiency contributes to tumorigenesis. To test this possibility, we generated human cell line and mouse model systems in which a single ATR allele was inactivated on a mismatch repair (MMR)-deficient background. Monoallelic ATR gene targeting in MLH1-deficient HCT 116 colon carcinoma cells resulted in hypersensitivity to genotoxic stress accompanied by dramatic increases in fragile site instability, and chromosomal amplifications and rearrangements. The ATR+/- HCT 116 cells also displayed compromised activation of Chk1, an important downstream target for ATR. In complementary studies, we demonstrated that mice bearing the same Atr+/- Mlh1-/- genotype were highly prone to both embryonic lethality and early tumor development. These results demonstrate that MMR proteins and ATR functionally interact during the cellular response to genotoxic stress, and that ATR serves as a haploinsufficient tumor suppressor in MMR-deficient cells.