The tumour suppressor PALB2 stimulates RAD51-mediated homologous recombination (HR) repair of DNA damage, whilst its steady-state association with active genes protects these loci from replication stress. Here, we report that the lysine acetyltransferases 2A and 2B (KAT2A/2B, also called GCN5/PCAF), two well-known transcriptional regulators, acetylate a cluster of seven lysine residues (7K-patch) within the PALB2 chromatin association motif (ChAM) and, in this way, regulate context-dependent PALB2 binding to chromatin. In unperturbed cells, the 7K-patch is targeted for KAT2A/2B-mediated acetylation, which in turn enhances the direct association of PALB2 with nucleosomes. Importantly, DNA damage triggers a rapid deacetylation of ChAM and increases the overall mobility of PALB2. Distinct missense mutations of the 7K-patch render the mode of PALB2 chromatin binding, making it either unstably chromatin-bound (7Q) or randomly bound with a reduced capacity for mobilisation (7R). Significantly, both of these mutations confer a deficiency in RAD51 foci formation and increase DNA damage in S phase, leading to the reduction of overall cell survival. Thus, our study reveals that acetylation of the ChAM 7K-patch acts as a molecular switch to enable dynamic PALB2 shuttling for HR repair while protecting active genes during DNA replication.