Homologous recombination repairs DNA double-strand breaks (DSB) using an intact dsDNA molecule as a template. It entails a homology search step, carried out along a conserved RecA/Rad51-ssDNA filament assembled on each DSB end. Whether, how and to what extent a DSB impacts chromatin folding, and how this (re)organization in turns influences the homology search process, remain ill-defined. Here we characterize two layers of spatial chromatin reorganization following DSB formation in Saccharomyces cerevisiae. Although cohesin folds chromosomes into cohesive arrays of ~20-kb-long chromatin loops as cells arrest in G2/M, the DSB-flanking regions interact locally in a resection- and 9-1-1 clamp-dependent manner, independently of cohesin, Mec1ATR, Rad52 and Rad51. This local structure blocks cohesin progression, constraining the DSB region at the base of a loop. Functionally, cohesin promotes DSB–dsDNA interactions and donor identification in cis, while inhibiting them in trans. This study identifies multiple direct and indirect ways by which cohesin regulates homology search during recombinational DNA repair.