Understanding the mechanisms promoting chromosomal translocations of the rearranging receptor loci in leukemia and lymphoma remains incomplete. Here we show that leukemias induced by aberrant activation of β-catenin in thymocytes, which bear recurrent Tcra/Myc-Pvt1 translocations, depend on Tcf-1. The DNA double strand breaks (DSBs) in the Tcra site of the translocation are Rag-generated, whereas the Myc-Pvt1 DSBs are not. Aberrantly activated β-catenin redirects Tcf-1 binding to novel DNA sites to alter chromatin accessibility and down-regulate genome-stability pathways. Impaired homologous recombination (HR) DNA repair and replication checkpoints lead to retention of DSBs that promote translocations and transformation of double-positive (DP) thymocytes. The resulting lymphomas, which resemble human T cell acute lymphoblastic leukemia (T-ALL), are sensitive to PARP inhibitors (PARPis). Our findings indicate that aberrant β-catenin signaling contributes to translocations in thymocytes by guiding Tcf-1 to promote the generation and retention of replication-induced DSBs allowing their coexistence with Rag-generated DSBs. Thus, PARPis could offer therapeutic options in hematologic malignancies with active Wnt/β-catenin signaling.