BACKGROUND: Telomerase is a ribonucleoprotein that copies a short RNA template into telomeric DNA, maintaining eukaryotic chromosome ends and preventing replicative senescence. Telomeres differentiate chromosome ends from DNA double-stranded breaks. Nevertheless, the DNA damage-responsive ATM kinases Tel1p and Mec1p are required for normal telomere maintenance in Saccharomyces cerevisiae. We tested whether the ATM kinases are required for telomerase enzyme activity or whether it is their action on the telomere that allows telomeric DNA synthesis. RESULTS: Cells lacking Tel1p and Mec1p had wild-type levels of telomerase activity in vitro. Furthermore, altering telomere structure in three different ways showed that telomerase can function in ATM kinase-deleted cells: tel1 mec1 cells senesced more slowly than tel1 mec1 cells that also lacked TLC1, which encodes telomerase RNA, suggesting that tel1 mec1 cells have residual telomerase function; deleting the telomere-associated proteins Rif1p and Rif2p in tel1 mec1 cells prevented senescence; we isolated a point mutation in the telomerase RNA template domain (tlc1-476A) that altered telomeric DNA sequences, causing uncontrolled telomeric DNA elongation and increasing single strandedness. In tel1 mec1 cells, tlc1-476A telomerase was also capable of uncontrolled synthesis, but only after telomeres had shortened for >30 generations. CONCLUSION: Our results show that, without Tel1p and Mec1p, telomerase is still active and can act in vivo when the telomere structure is disrupted by various means. Hence, a primary function of the ATM-family kinases in telomere maintenance is to act on the substrate of telomerase, the telomere, rather than to activate the enzymatic activity of telomerase.