ARH3/ADPRHL2 and PARG are the primary enzymes reversing ADP-ribosylation in vertebrates, yet their functions in vivo remain unclear. ARH3 is the only hydrolase able to remove serine-linked mono(ADP-ribose) (MAR) but is much less efficient than PARG against poly(ADP-ribose) (PAR) chains in vitro. Here, by using ARH3-deficient cells, we demonstrate that endogenous MARylation persists on chromatin throughout the cell cycle, including mitosis, and is surprisingly well tolerated. Conversely, persistent PARylation is highly toxic and has distinct physiological effects, in particular on active transcription histone marks such as H3K9ac and H3K27ac. Furthermore, we reveal a synthetic lethal interaction between ARH3 and PARG and identify loss of ARH3 as a mechanism of PARP inhibitor resistance, both of which can be exploited in cancer therapy. Finally, we extend our findings to neurodegeneration, suggesting that patients with inherited ARH3 deficiency suffer from stress-induced pathogenic increase in PARylation that can be mitigated by PARP inhibition.