Telomere length maintenance ensures self-renewal of human embryonic stem cells (hESCs) and induced pluripotent stem cells (hiPSCs); however, the mechanisms governing telomere length homeostasis in these cell types are unclear. Here, we report that telomere length is determined by the balance between telomere elongation, which is mediated by telomerase, and telomere trimming, which is controlled by XRCC3 and Nbs1, homologous recombination proteins that generate single-stranded C-rich telomeric DNA and double-stranded telomeric circular DNA (T-circles), respectively. We found that reprogramming of differentiated cells induces T-circle and single-stranded C-rich telomeric DNA accumulation, indicating the activation of telomere trimming pathways that compensate telomerase-dependent telomere elongation in hiPSCs. Excessive telomere elongation compromises telomere stability and promotes the formation of partially single-stranded telomeric DNA circles (C-circles) in hESCs, suggesting heightened sensitivity of stem cells to replication stress at overly long telomeres. Thus, tight control of telomere length homeostasis is essential to maintain telomere stability in hESCs.