Telomeres are hot spots for mutagenic oxidative and methylation base damage due to their high guanine content. We used single-molecule fluorescence resonance energy transfer detection and biochemical assays to determine how different positions and types of guanine damage and mutations alter telomeric G-quadruplex structure and telomerase activity. We compared 15 modifications, including 8-oxoguanine (8oxoG), O-6-methylguanine (O6mG), and all three possible point mutations (G to A, T, and C) at the 3' three terminal guanine positions of a telomeric G-quadruplex, which is the critical access point for telomerase. We found that G-quadruplex structural instability was induced in the order C < T < A ≤ 8oxoG < O6mG, with the perturbation caused by O6mG far exceeding the perturbation caused by other base alterations. For all base modifications, the central G position was the most destabilizing among the three terminal guanines. While the structural disruption by 8oxoG and O6mG led to concomitant increases in telomerase binding and extension activity, the structural perturbation by point mutations (A, T, and C) did not, due to disrupted annealing between the telomeric overhang and the telomerase RNA template. Repositioning the same mutations away from the terminal guanines caused both G-quadruplex structural instability and elevated telomerase activity. Our findings demonstrate how a single-base modification drives structural alterations and telomere lengthening in a position-dependent manner. Furthermore, our results suggest a long-term and inheritable effect of telomeric DNA damage that can lead to telomere lengthening, which potentially contributes to oncogenesis.