Inherited mutations in human PALB2 are associated with a predisposition to breast and pancreatic cancers. PALB2's tumor-suppressing effect is thought to be based on its ability to facilitate BRCA2's function in homologous recombination. However, the biochemical properties of PALB2 are unknown. Here we show that human PALB2 binds DNA, preferentially D-loop structures, and directly interacts with the RAD51 recombinase to stimulate strand invasion, a vital step of homologous recombination. This stimulation occurs through reinforcing biochemical mechanisms, as PALB2 alleviates inhibition by RPA and stabilizes the RAD51 filament. Moreover, PALB2 can function synergistically with a BRCA2 chimera (termed piccolo, or piBRCA2) to further promote strand invasion. Finally, we show that PALB2-deficient cells are sensitive to PARP inhibitors. Our studies provide the first biochemical insights into PALB2's function with piBRCA2 as a mediator of homologous recombination in DNA double-strand break repair.