Telomeres are essential for chromosome maintenance. Cdc13 is a single-stranded telomeric DNA binding protein that caps telomeres and regulates telomerase function in yeast. Although specific binding of Cdc13 to telomeric DNA is critical for telomere protection, the detail mechanism how Cdc13-DNA complex protects telomere is unclear. Using two single-molecule methods, tethered particle motion and atomic force microscopy, we demonstrate that specific binding of Cdc13 on single-stranded telomeric DNA shortens duplex DNA into distinct states differed by ∼70-80 base pairs. DNA shortening by Cdc13 is dynamic and independent of duplex DNA sequences or length. Significantly, we found that Pif1 helicase is incapable of removing Cdc13 from the shortened DNA-Cdc13 complex, suggesting that Cdc13 forms structurally stable complex by shortening of the bound DNA. Together our data identified shortening of DNA by Cdc13 and provided an indication for efficient protection of telomere ends by the shortened DNA-Cdc13 complex.