The terminal t-loop structure adopted by mammalian telomeres is thought to prevent telomeres from being recognized as double-stranded DNA breaks by sequestering the 3' single-stranded G-rich overhang from exposure to the DNA damage machinery. The POT1 (protection of telomeres) protein binds the single-stranded overhang and is required for both chromosomal end protection and telomere length regulation. The mouse genome contains two POT1 orthologs, Pot1a and Pot1b. Here we show that conditional deletion of Pot1a elicits a DNA damage response at telomeres, resulting in p53-dependent replicative senescence. Pot1a-deficient cells exhibit overall telomere length and 3' overhang elongation as well as aberrant homologous recombination (HR) at telomeres, manifested as increased telomere sister chromatid exchanges and formation of telomere circles. Telomeric HR following Pot1a loss requires NBS1. Pot1a deletion also results in chromosomal instability. Our results suggest that POT1a is crucial for the maintenance of both telomere integrity and overall genomic stability.