The resolution of joint molecules that link recombining sister chromatids is essential for chromosome segregation. Here, we determine the fate of unresolved recombination intermediates arising in cells lacking two nucleases required for resolution (GEN1 -/- knockout cells depleted of MUS81). We find that intermediates persist until mitosis and form a distinct class of anaphase bridges, which we term homologous recombination ultra-fine bridges (HR-UFBs). HR-UFBs are distinct from replication stress-associated UFBs, which arise at common fragile sites, and from centromeric UFBs. HR-UFBs are processed by BLM helicase to generate single-stranded RPA-coated bridges that are broken during mitosis. In the next cell cycle, DNA breaks activate the DNA damage checkpoint response, and chromosome fusions arise by non-homologous end joining. Consequently, the cells undergo cell cycle delay and massive cell death. These results lead us to present a model detailing how unresolved recombination intermediates can promote DNA damage and chromosomal instability.