Changes in telomere chromatin have been linked to cellular senescence, but the underlying mechanisms and impact on lifespan are unclear. We found that inactivation of the Sas2 histone acetyltransferase delays senescence in Saccharomyces cerevisiae telomerase (tlc1) mutants through a homologous recombination-dependent mechanism. Sas2 acetylates histone H4 lysine 16 (H4K16), and telomere shortening in tlc1 mutants was accompanied by a selective and Sas2-dependent increase in subtelomeric H4K16 acetylation. Further, mutation of H4 lysine 16 to arginine, which mimics constitutively deacetylated H4K16, delayed senescence and was epistatic to sas2 deletion, indicating that deacetylated H4K16 mediates the delay caused by sas2 deletion. Sas2 normally prevents the Sir2/3/4 heterochromatin complex from leaving the telomere and spreading to internal euchromatic loci. Senescence was delayed by sir3 deletion, but not sir2 deletion, indicating that senescence delay is mediated by release of Sir3 specifically from the telomere repeats. In contrast, sir4 deletion sped senescence and blocked the delay conferred by sas2 or sir3 deletion. We thus show that manipulation of telomere chromatin modulates senescence caused by telomere shortening.