The DNA-repair enzyme Tdp2 resolves 5′-phosphotyrosyl DNA adducts and mediates resistance to anticancer drugs that target covalent topoisomerase-DNA complexes. Tdp2 also participates in key signaling pathways during development and tumorigenesis and cleaves a protein-RNA linkage during picornavirus replication. The crystal structure of zebrafish Tdp2 bound to DNA reveals a deep, narrow basic groove that selectively accommodates the 5′ end of single-stranded DNA in a stretched conformation. The crystal structure of the full-length Caenorhabditis elegans Tdp2 shows that this groove can also accommodate an acidic peptide stretch in vitro, with glutamate and aspartate side chains occupying the DNA backbone phosphate-binding sites. This extensive molecular mimicry suggests a potential mechanism for autoregulation and interaction of Tdp2 with phosphorylated proteins in signaling. Our study provides a framework to interrogate functions of Tdp2 and develop inhibitors for chemotherapeutic and antiviral applications.