We report cytologic and genetic data indicating that telomere dysfunction induces a DNA damage response in mammalian cells. Dysfunctional, uncapped telomeres, created through inhibition of TRF2, became associated with DNA damage response factors, such as 53BP1, gamma-H2AX, Rad17, ATM, and Mre11. We refer to the domain of telomere-associated DNA damage factors as a Telomere Dysfunction-Induced Focus (TIF). The accumulation of 53BP1 on uncapped telomeres was reduced in the presence of the PI3 kinase inhibitors caffeine and wortmannin, which affect ATM, ATR, and DNA-PK. By contrast, Mre11 TIFs were resistant to caffeine, consistent with previous findings on the Mre11 response to ionizing radiation. A-T cells had a diminished 53BP1 TIF response, indicating that the ATM kinase is a major transducer of this pathway. However, in the absence of ATM, TRF2 inhibition still induced TIFs and senescence, pointing to a second ATM-independent pathway. We conclude that the cellular response to telomere dysfunction is governed by proteins that also control the DNA damage response. TIFs represent a new tool for evaluating telomere status in normal and malignant cells suspected of harboring dysfunctional telomeres. Furthermore, induction of TIFs through TRF2 inhibition provides an opportunity to study the DNA damage response within the context of well-defined, physically marked lesions.