Telomeres are nucleoprotein complexes that protect the ends of eukaryotic linear chromosomes from degradation and fusions. Telomere dysfunction leads to cell growth arrest, oncogenesis, and premature aging. Telomeric RNAs have been found in all studied species; however, their functions and biogenesis are not clearly understood. We studied the mechanisms of development disorders observed upon overexpression of telomeric repeats in Drosophila. In somatic cells, overexpression of telomeric retrotransposon HeT-A is cytotoxic and leads to the accumulation of HeT-A Gag near centrosomes. We found that RNA and RNA-binding protein Gag encoded by the telomeric retrotransposon HeT-A interact with Polo and Cdk1 mitotic kinases, which are conserved regulators of centrosome biogenesis and cell cycle. The depletion of proteins Spindle E, Ccr4 or Ars2 resulting in HeT-A overexpression in the germline was accompanied by mislocalization of Polo as well as its abnormal stabilization during oogenesis and severe deregulation of centrosome biogenesis leading to maternal-effect embryonic lethality. These data suggest a mechanistic link between telomeric HeT-A ribonucleoproteins and cell cycle regulators that ensures the cell response to telomere dysfunction.