The essential functions of the conserved Smc5/6 complex remain elusive. To uncover its roles in genome maintenance, we established Saccharomyces cerevisiae cell-cycle-regulated alleles that enable restriction of Smc5/6 components to S or G2/M. Unexpectedly, the essential functions of Smc5/6 segregated fully and selectively to G2/M. Genetic screens that became possible with generated alleles identified processes that crucially rely on Smc5/6 specifically in G2/M: metabolism of DNA recombination structures triggered by endogenous replication stress, and replication through natural pausing sites located in late-replicating regions. In the first process, Smc5/6 modulates remodeling of recombination intermediates, cooperating with dissolution activities. In the second, Smc5/6 prevents chromosome fragility and toxic recombination instigated by prolonged pausing and the fork protection complex, Tof1-Csm3. Our results thus dissect Smc5/6 essential roles and reveal that combined defects in DNA damage tolerance and pausing site-replication cause recombination-mediated DNA lesions, which we propose to drive developmental and cancer-prone disorders.