Nonhomologous end-joining (NHEJ) repairs DNA double-strand breaks created by ionizing radiation and V(D)J recombination. To repair the broken ends, NHEJ processes noncompatible ends into a ligatable form but suppresses processing of compatible ends. It is not known how NHEJ controls polymerase and nuclease activities to act exclusively on noncompatible ends. Here, we analyzed processing independently of ligation by using a two-stage assay with extracts that recapitulated the properties of NHEJ in vivo. Processing of noncompatible ends required wortmannin-sensitive kinase activity. Since DNA-dependent protein kinase catalytic subunit (DNA-PKcs) brings the ends together before undergoing activation of its kinase, this suggests that processing occurred after synapsis of the ends. Surprisingly, all polymerase and most nuclease activity required XRCC4/Ligase IV. This suggests a mechanism for how NHEJ suppresses processing to optimize the preservation of DNA sequence.