DNA ligase I (LigI) plays a central role in the joining of strand interruptions during replication and repair. In our current study, we provide evidence that DNA ligase III (LigIII) and XRCC1, which form a complex that functions in single-strand break repair, are required for the proliferation of mammalian LigI-depleted cells. We show from our data that in cells with either dysfunctional LigI activity or depleted of this enzyme, both LigIII and XRCC1 are retained on the chromatin and accumulate at replication foci. We also demonstrate that the LigI and LigIII proteins cooperate to inhibit sister chromatid exchanges but that only LigI prevents telomere sister fusions. Taken together, these results suggest that in cells with dysfunctional LigI, LigIII contributes to the ligation of replication intermediates but not to the prevention of telomeric instability.Electronic supplementary materialThe online version of this article (doi:10.1007/s00018-012-0975-8) contains supplementary material, which is available to authorized users.