The function of TERRA in the regulation of telomerase in human cells is still debated. While TERRA interacts with telomerase, how it regulates telomerase function remains unknown. Here, we show that TERRA colocalizes with the telomerase RNA subunit hTR in the nucleoplasm and at telomeres during different phases of the cell cycle. We report that TERRA transcripts relocate away from chromosome ends during telomere lengthening, leading to a reduced number of telomeric TERRA-hTR molecules and consequent increase in "TERRA-free" telomerase molecules at telomeres. Using live-cell imaging and super-resolution microscopy, we show that upon transcription, TERRA relocates from its telomere of origin to long chromosome ends. Furthermore, TERRA depletion by antisense oligonucleotides promoted hTR localization to telomeres, leading to increased residence time and extended half-life of hTR molecules at telomeres. Overall, our findings indicate that telomeric TERRA transcripts inhibit telomere elongation by telomerase acting in trans, impairing telomerase access to telomeres that are different from their chromosome end of origin.