PALB2 has been identified as a breast and pancreatic cancer susceptibility gene. Utilizing a targeted sequencing approach, we discovered two novel germline missense PALB2 variants c.191C>T and c.311C>T, encoding p.Ser64Leu and p.Pro104Leu, respectively, in individuals in a pancreatic cancer registry. No missense PALB2 variants from familial pancreatic cancer patients, and few PALB2 variants overall, have been functionally characterized. Given the known role of PALB2, we tested the impact of p.Ser64Leu and p.Pro104Leu variants on DNA damage responses. Neither p.Ser64Leu nor p.Pro104Leu have clear effects on interactions with BRCA1 and KEAP1, which are mediated by adjacent motifs in PALB2. However, both variants are associated with defective recruitment of PALB2, and the RAD51 recombinase downstream, to DNA damage foci. Furthermore, p.Ser64Leu and p.Pro104Leu both largely compromise DNA double-strand break-initiated homologous recombination, and confer increased cellular sensitivity to ionizing radiation (IR) and the poly (ADP-ribose) polymerase (PARP) inhibitor Olaparib. Taken together, our results represent the first demonstration of functionally deleterious PALB2 missense variants associated with familial pancreatic cancer and of deleterious variants in the N-terminus outside of the coiled-coil domain. Furthermore, our results suggest the possibility of personalized treatments, using IR or PARP inhibitor, of pancreatic and other cancers that carry a deleterious PALB2 variant.