KGCompass is a novel approach for enhancing repository-level software repair by utilizing a repository-aware knowledge graph. This knowledge graph effectively connects repository artifacts like issues and pull requests with codebase entities such as files, classes, and functions. By leveraging this unified representation, KGCompass can accurately narrow down the search space for bug locations and provide relevant contextual information to large language models (LLMs). Experimental results on the SWE-Bench-Lite benchmark demonstrate that KGCompass achieves state-of-the-art repair performance and function-level localization accuracy with a low computational cost. A key finding is that many bugs require multi-hop traversals within the knowledge graph for accurate localization, highlighting the importance of capturing indirect relationships.