DNA double-strand breaks (DSBs) must be repaired to ensure cell survival and genomic integrity. In yeast, the Mre11-Rad50-Xrs2 complex (MRX) collaborates with Sae2 to initiate DSB repair. Sae2 stimulates two MRX nuclease activities, endonuclease and 3’−5’ exonuclease. However, how Sae2 controls the two nuclease activities remains enigmatic. Using a combined genetic and biochemical approach, we identified a separation-of-function rad50 mutation, rad50-C47, that causes a defect in Sae2-dependent MRX 3’−5’ exonuclease activity, but not endonuclease activity. We found that both the endo- and 3’−5’ exonuclease activities are essential to release Spo11 from DNA ends, whereas only the endonuclease activity is required for hairpin removal. We also uncovered that MRX-Sae2 endonuclease introduces a cleavage at defined distances from the Spo11-blocked end with gradually decreasing efficiency. Our findings demonstrate that Sae2 stimulates the MRX endo- and exonuclease activities via Rad50 by different mechanisms, ensuring diverse actions of MRX-Sae2 nuclease at DNA ends.