Human embryonic stem (ES) cells are highly sensitive to environmental insults including DNA damaging agents, responding with high levels of apoptosis. To understand the response of human ES cells to DNA damage, we investigated the function of the ataxia telangiectasia mutated (ATM) DNA damage signaling pathway in response to gamma-irradiation. Here, we demonstrate for the first time in human ES cells that ATM kinase is phosphorylated and properly localized to the sites of DNA double-strand breaks within 15 minutes of irradiation. Activation of ATM kinase resulted in phosphorylation of its downstream targets: Chk2, p53, and Nbs1. In contrast to murine ES cells, Chk2 and p53 were localized to the nucleus of irradiated human ES cells. We further show that irradiation resulted in a temporary arrest of the cell cycle at the G(2), but not G(1), phase. Human ES cells resumed cycling approximately 16 hours after irradiation, but had a fourfold higher incidence of aberrant mitotic figures compared to nonirradiated cells. Finally, we demonstrate an essential role of ATM in establishing G(2) arrest since inhibition with the ATM-specific inhibitor KU55933 resulted in abolishment of G(2) arrest, evidenced by an increase in the number of cycling cells 2 hours after irradiation. In summary, these results indicate that human ES cells activate the DNA damage checkpoint, resulting in an ATM-dependent G(2) arrest. However, these cells re-enter the cell cycle with prominent mitotic spindle defects.