The presence of DNA breaks has extensive biochemical implications for the integrity of the genome. It is well established that distinct DNA damage response proteins are recruited to, and accumulate at, sites of genomic lesions, including kinases that initiate multiple DNA damage signaling cascades. The repair of DNA breaks is facilitated by the phosphorylation of H2AX, which organizes DNA damage response factors in the vicinity of the lesion. Metabolism of the DNA breaks occurs in a chromatin environment and modulating chromatin structure is necessary for the fidelity of the DNA damage response. We set out to determine in living cells both how chromatin is remodeled in the presence of DNA breaks and whether the establishment of large sub-cellular DNA damage response domains influences other DNA metabolic processes, such as transcription. Using a photoactivatable histone H2B, we examined the mobility and structure of chromatin immediately after the introduction of DNA breaks. We find that chromatin-containing damaged DNA exhibits limited mobility but undergoes an initial energy-dependent local expansion that occurs independently of H2AX and ATM. We also took advantage of the large copy number, tandem gene arrangement, and spatial organization of ribosomal transcription units as a model system to measure the kinetics of transcription in real time in the presence of DNA breaks. We find that RNA polI inhibition is not the direct result of the physical DNA break but mediated by ATM kinase activity and surrogate DNA repair proteins. We propose that the localized opening of chromatin at DNA breaks establishes an accessible biochemically unique sub-nuclear environment that facilitates DNA damage signaling and repair.