Fanconi anemia (FA) is a devastating genetic disease, associated with genomic instability and defects in DNA interstrand cross-link (ICL) repair. The FA repair pathway is not thought to be conserved in budding yeast, and although the yeast Mph1 helicase is a putative homolog of human FANCM, yeast cells disrupted for MPH1 are not sensitive to ICLs. Here, we reveal a key role for Mph1 in ICL repair when the Pso2 exonuclease is inactivated. We find that the yeast FANCM ortholog Mph1 physically and functionally interacts with Mgm101, a protein previously implicated in mitochondrial DNA repair, and the MutSα mismatch repair factor (Msh2-Msh6). Co-disruption of MPH1, MGM101, MSH6, or MSH2 with PSO2 produces a lesion-specific increase in ICL sensitivity, the elevation of ICL-induced chromosomal rearrangements, and persistence of ICL-associated DNA double-strand breaks. We find that Mph1-Mgm101-MutSα directs the ICL-induced recruitment of Exo1 to chromatin, and we propose that Exo1 is an alternative 5'-3' exonuclease utilised for ICL repair in the absence of Pso2. Moreover, ICL-induced Rad51 chromatin loading is delayed when both Pso2 and components of the Mph1-Mgm101-MutSα and Exo1 pathway are inactivated, demonstrating that the homologous recombination stages of ICL repair are inhibited. Finally, the FANCJ- and FANCP-related factors Chl1 and Slx4, respectively, are also components of the genetic pathway controlled by Mph1-Mgm101-MutSα. Together this suggests that a prototypical FA-related ICL repair pathway operates in budding yeast, which acts redundantly with the pathway controlled by Pso2, and is required for the targeting of Exo1 to chromatin to execute ICL repair.