The NuA4/TIP60 acetyltransferase complex is a key regulator of genome expression and stability. Here we identified MBTD1 as a stable subunit of the complex, and we reveal that, via a histone reader domain for H4K20me1/2, MBTD1 allows TIP60 to associate with specific gene promoters and to promote the repair of DNA double-strand breaks by homologous recombination. It was previously suggested that TIP60-dependent acetylation of H4 regulates binding of the non-homologous end joining factor 53BP1, which engages chromatin through simultaneous binding of H4K20me2 and H2AK15ub. We find that the TIP60 complex regulates association of 53BP1 partly by competing for H4K20me2 and by regulating H2AK15ub. Ubiquitylation of H2AK15 by RNF168 inhibits chromatin acetylation by TIP60, while this residue can be acetylated by TIP60 in vivo, blocking its ubiquitylation. Altogether, these results uncover an intricate mechanism orchestrated by the TIP60 complex to regulate 53BP1-dependent repair through competitive bivalent binding and modification of chromatin. Display omitted •We identify MBTD1 as a stable subunit of the TIP60/NuA4 complex•MBTD1 as part of TIP60 regulates transcription and repair of DNA breaks•MBTD1 competes with 53BP1 for binding to the H4K20me mark•TIP60 acetylates H2AK15 and blocks its ubiquitylation by RNF168 Jacquet et al. identify H4K20me-binding MBTD1 as a stable subunit of the TIP60/NuA4 acetyltransferase complex. MBTD1 assists TIP60 in gene-specific transcription and repair of DNA double-strand breaks by homologous recombination. Moreover, TIP60 regulates the bivalent association of 53BP1 to chromatin to influence repair pathway choice.