DNA damage is the driving force for mutation and genomic instability, which can both lead to cell death or carcinogenesis. DNA double strand breaks are detected and processed in part by the Mre11-Rad50-Nbs1 protein complex. Although the Mre11-Rad50-Nbs1 complex is essential, several spontaneous mutations have been noted in various cancers. One of these mutations, within a conserved motif of Rad50, resulted in an outlier curative response in a clinical trial. We show through biochemical and biophysical characterization that this cancer-associated mutation and a second mutation to the adjacent residue, previously described in a breast cancer patient, both have gain-of-function Rad50 ATP hydrolysis activity that results not from faster association of the ATP-bound form but faster dissociation leading to less stable Rad50 dimer. This disruption impairs the regulatory functions of the protein complex leading to a loss of exonuclease activity from Mre11. Interestingly, these two mutations affect Rad50 structure and dynamics quite differently. These studies describe the relationship between function, structure, and molecular motions in improperly regulated Rad50, which reveal the underlying biophysical mechanism for how these two cancer-associated mutations affect the cell.