Alpha thalassemia/mental retardation syndrome X-linked chromatin remodeler (ATRX), a DAXX (death domain-associated protein) interacting protein, is often lost in cells using the alternative lengthening of telomeres (ALT) pathway, but it is not known how ATRX loss leads to ALT. We report that ATRX deletion from mouse cells altered the repair of telomeric double-strand breaks (DSBs) and induced ALT-like phenotypes, including ALT-associated promyelocytic leukemia (PML) bodies (APBs), telomere sister chromatid exchanges (T-SCEs), and extrachromosomal telomeric signals (ECTSs). Mechanistically, we show that ATRX affects telomeric DSB repair by promoting cohesion of sister telomeres and that loss of ATRX in ALT cells results in diminished telomere cohesion. In addition, we document a role for DAXX in the repair of telomeric DSBs. Removal of telomeric cohesion in combination with DAXX deficiency recapitulates all telomeric DSB repair phenotypes associated with ATRX loss. The data reveal that ATRX has an effect on telomeric DSB repair and that this role involves both telomere cohesion and a DAXX-dependent pathway.