Clustered DNA damage induced by ionizing radiation is refractory to repair and may trigger carcinogenic events for reasons that are not well understood. Here, we used an in situ method to directly monitor induction and repair of clustered DNA lesions in individual cells. We showed, consistent with biophysical modeling, that the kinetics of loss of clustered DNA lesions was substantially compromised in human fibroblasts. The unique spatial distribution of different types of DNA lesions within the clustered damages, but not the physical location of these damages within the subnuclear domains, determined the cellular ability to repair the damage. We then examined checkpoint arrest mechanisms and yield of gross chromosomal aberrations. Induction of nonrepairable clustered damage affected only G2 accumulation but not the early G2/M checkpoint. Further, cells that were released from the G2/M checkpoint with unrepaired clustered damage manifested a spectrum of chromosome aberrations in mitosis. Difficulties associated with clustered DNA damage repair and checkpoint release before the completion of clustered DNA damage repair appear to promote genome instability that may lead to carcinogenesis.