Over half of all cancer patients undergo radiation therapy but there is an unmet need for more efficacious combination strategies with molecular targeted drugs. DNA damage response has emerged as an important intervention point for improving anti-tumor effects of radiation and several inhibitors are currently in development. Ataxia telangiectasia mutated (ATM) kinase is a key regulator of cellular response to DNA double strand breaks and a potential target for radiosensitization. We recently reported two new potent and selective ATM inhibitors, M3541 and M4076, that effectively sensitize cancer cells to radiation and regress human xenografts in clinically relevant animal models. Here, we dive deeper into the cellular events in irradiated cancer cells exposed to ATM inhibitors. Suppression of ATM activity inhibited radiation-induced ATM signaling and abrogated G1 checkpoint activation resulting in enhanced cell death. Our data indicated that entry into mitosis with gross structural abnormalities in multiple chromosomes is the main mechanism behind the increased cell killing. Misalignment and mis-segregation led to formation of multiple micronuclei and robust activation of the interferon response and inflammatory signaling via the cGAS/STING/TBK1 pathway. Cancer cells exposed to radiation in the presence of M3541 were more susceptible to killing in co-culture with NK cells from healthy donors. In addition, strong upregulation of PD-L1 expression was observed in the surviving irradiated cancer cells exposed to M3541. Simultaneous activation of the STING pathway and PD-L1 suggested that combination of radiation, ATM inhibitors and PD-L1 targeted therapy may offer a novel approach to radio-immunotherapy of locally advanced tumors.