The repair of spontaneous or induced DNA damage by homologous recombination (HR) in Saccharomyces cerevisiae will suppress chromosome rearrangements. Alternative chromosome healing pathways can result in chromosomal instability. One of these pathways is de novo telomere addition where the end of a broken chromosome is stabilized by telomerase-dependent addition of telomeres at non-telomeric sites. De novo telomere addition requires the recruitment of telomerase to chromosomal targets. Subsequently, annealing of the telomerase reverse transcriptase RNA-template (guide RNA) at short regions of homology is followed by extension of the nascent 3'-end of the broken chromosome to copy a short region of the telomerase guide RNA; multiple cycles of this process yield the new telomere. Proteins including Pif1 helicase, the single-stranded DNA-binding protein Cdc13 and the Ku heterocomplex are known to participate in native telomere functions and also regulate the de novo telomere addition reaction. Studies of the sequences added at de novo telomeres have lead to a detailed description of the annealing-extension-dissociation cycles that copy the telomerase guide RNA, which can explain the heterogeneity of telomeric repeats at de novo and native telomeres in S. cerevisiae.