The WRN helicase/exonuclease protein is required for proper replication fork recovery and maintenance of genome stability. However, whether the different catalytic activities of WRN cooperate to recover replication forks in vivo is unknown. Here, we show that, in response to replication perturbation induced by low doses of the TOP1 inhibitor camptothecin, loss of the WRN exonuclease resulted in enhanced degradation and ssDNA formation at nascent strands by the combined action of MRE11 and EXO1, as opposed to the limited processing of nascent strands performed by DNA2 in wild-type cells. Nascent strand degradation by MRE11/EXO1 took place downstream of RAD51 and affected the ability to resume replication, which correlated with slow replication rates in WRN exonuclease-deficient cells. In contrast, loss of the WRN helicase reduced exonucleolytic processing at nascent strands and led to severe genome instability. Our findings identify a novel role of the WRN exonuclease at perturbed forks, thus providing the first in vivo evidence for a distinct action of the two WRN enzymatic activities upon fork stalling and providing insights into the pathological mechanisms underlying the processing of perturbed forks.