Double-strand breaks activate the ataxia telangiectasia mutated (ATM) kinase, which promotes the accumulation of DNA damage factors in the chromatin surrounding the break. The functional significance of the resulting DNA damage foci is poorly understood. Here we show that 53BP1 (also known as TRP53BP1), a component of DNA damage foci, changes the dynamic behaviour of chromatin to promote DNA repair. We used conditional deletion of the shelterin component TRF2 (also known as TERF2) from mouse cells (TRF2(fl/-)) to deprotect telomeres, which, like double-strand breaks, activate the ATM kinase, accumulate 53BP1 and are processed by non-homologous end joining (NHEJ). Deletion of TRF2 from 53BP1-deficient cells established that NHEJ of dysfunctional telomeres is strongly dependent on the binding of 53BP1 to damaged chromosome ends. To address the mechanism by which 53BP1 promotes NHEJ, we used time-lapse microscopy to measure telomere dynamics before and after their deprotection. Imaging showed that deprotected telomeres are more mobile and sample larger territories within the nucleus. This change in chromatin dynamics was dependent on 53BP1 and ATM but did not require a functional NHEJ pathway. We propose that the binding of 53BP1 near DNA breaks changes the dynamic behaviour of the local chromatin, thereby facilitating NHEJ repair reactions that involve distant sites, including joining of dysfunctional telomeres and AID (also known as AICDA)-induced breaks in immunoglobulin class-switch recombination.