By covalently linking Watson and Crick strands, DNA interstrand crosslinks (ICLs) are highly toxic lesions that block DNA replication and threaten genome integrity. The Fanconi anemia (FA) pathway orchestrates ICL repair during DNA replication, with ubiquitylated FANCI-FANCD2 (ID2) marking the activation step that triggers incisions on one DNA strand to unhook the ICL. ICL unhooking generates a two-ended double-strand break (DSB) on one of the daughter molecules, while leaving a gap comprising the ICL-adduct on the other. Restoration of the adducted molecule by DNA polymerase zeta-mediated translesion synthesis (TLS) creates a template required for repair of the DSB via homologous recombination (HR), but how these processes are coordinated to ensure faithful ICL repair is not known. Here, we uncover a crucial role for SCAI in promoting ICL repair downstream of ID2 activation. Using Xenopus egg extracts and human cells, we show that SCAI forms a complex with DNA polymerase zeta and localizes to ICLs during DNA replication. SCAI-deficient cells are exquisitely sensitive to ICL-inducing drugs and display principal hallmarks of FA gene inactivation, including broken and radial chromosome accumulation. In the absence of SCAI, DSB intermediates are preferentially re-ligated by illegitimate DNA polymerase theta-dependent microhomology-mediated end-joining (MMEJ). Consistently, the hypersensitivity of SCAI-deficient cells to ICLs can be reverted by suppressing FA pathway activation. Our work establishes SCAI as a critical mediator of ICL resolution via the FA pathway, acting at the interphase of the TLS and HR steps to prevent erroneous repair and chromosomal instability.