DNA polymerase beta (Polbeta) is a DNA repair protein that functions in base excision repair and meiosis. The enzyme has deoxyribose phosphate lyase and polymerase activity, but it is error prone because it bears no proofreading activity. Errors in DNA repair can lead to the accumulation of mutations and consequently to tumorigenesis. Polbeta expression has been found to be higher in tumors, and deregulation of its expression has been found to induce chromosomal instability, a hallmark of tumorigenesis, but the underlying mechanisms are unclear. In the present study, we have investigated whether ectopic expression of Polbeta influences the stability of chromosomes in a murine mammary cell line. The results demonstrate a telomere dysfunction phenotype: an increased rate of telomere loss and chromosome fusion, suggesting that ectopic expression of Polbeta leads to telomere dysfunction. In addition, Polbeta interacts with TRF2, a telomeric DNA binding protein. Colocalization of the two proteins occurs at nontelomeric sites and appears to be influenced by the change in the status of the telomeric complex.