The DNA-protein complexes at the ends of linear eukaryotic chromosomes are called the telomeres. In Saccharomyces cerevisiae, telomeric DNA consists of a variable length of the short repeated sequence C1-3A. The length of yeast telomeres can be altered by mutation, by changing the levels of telomere binding proteins, or by increasing the amount of C1-3A DNA sequences. Cells bearing the tel1-1 or tel2-1 mutations, known previously to have short telomeres, did not respond to perturbations that caused telomere lengthening in wild-type cells. The transcription of genes placed near yeast telomeres is reversibly repressed, a phenomenon called the telomere position effect. The tel2-1 mutation reduced the position effect but did not affect transcriptional repression at the silent mating type cassettes, HMRa and HML alpha. The TEL2 gene was cloned, sequenced, and disrupted. Cells lacking TEL2 function died, with some cells arresting as large cells with three or four small protrusions or "blebs."