53BP1 and other DNA damage response (DDR) proteins form foci at double-strand breaks (DSBs) which promote their repair by nonhomologous end joining (NHEJ). Focal accumulation of 53BP1 depends on the specific interaction of its tandem Tudor domain with dimethylated lysine 20 in histone H4 (H4K20me2). How 53BP1 foci dynamics are regulated is unclear since H4K20me2 is highly abundant, established largely in the absence of DNA damage, and uncertainty exists about the roles of candidate H4K20 methyltransferases in 53BP1 foci formation. Here, we show that 53BP1 foci assemble primarily on H4K20me2 established prior to DNA damage by the SETD8 and SUV420 methyltransferases rather than de novo H4K20 methylation mediated by MMSET/WHSC1. Moreover, we define a novel role for H4K16 acetylation in regulating 53BP1 foci dynamics. Concurrent acetylation at H4K16 antagonizes 53BP1 binding to extant H4K20me2 until DSBs elicit transient, localized H4 deacetylation that facilitates 53BP1 foci formation and NHEJ, and is associated with global repression of gene transcription. Our findings demonstrate that rapid induction of H4 deacetylation by DSBs affects multiple aspects of the DDR, and also suggest that antagonism of 53BP1 binding to H4K20me2 by H4K16 hyperacetylation may contribute to the efficacy of histone deacetylase inhibitors for cancer therapy.