Eukaryotic DNA is packaged into chromatin, which regulates genome activities such as telomere maintenance. This study focuses on the interactions of a myb/SANT DNA-binding domain from the telomere-binding protein, TRF2, with reconstituted telomeric nucleosomal array fibers. Biophysical characteristics of the factor-bound nucleosomal arrays were determined by analytical agarose gel electrophoresis (AAGE) and single molecules were visualized by atomic force microscopy (AFM). The TRF2 DNA-binding domain (TRF2 DBD) neutralized more negative charge on the surface of nucleosomal arrays than histone-free DNA. Binding of TRF2 DBD at lower concentrations increased the radius and conformational flexibility, suggesting a distortion of the fiber structure. Additional loading of TRF2 DBD onto the nucleosomal arrays reduced the flexibility and strongly blocked access of micrococcal nuclease as contour lengths shortened, consistent with formation of a unique, more compact higher-order structure. Mirroring the structural results, TRF2 DBD stimulated a strand invasion-like reaction, associated with telomeric t-loops, at lower concentrations while inhibiting the reaction at higher concentrations. Full-length TRF2 was even more effective at stimulating this reaction. The TRF2 DBD had less effect on histone-free DNA structure and did not stimulate the t-loop reaction with this substrate, highlighting the influence of chromatin structure on the activities of DNA-binding proteins.