Telomere maintenance is required for chromosome stability, and telomeres are typically replicated by the telomerase reverse transcriptase. In both tumor and yeast cells that lack telomerase, telomeres are maintained by an alternative recombination mechanism. By using an in vivo inducible Cre-loxP system to generate and trace the fate of marked telomeric DNA-containing rings, the efficiency of telomere-telomere recombination can be determined quantitatively. We show that the telomeric loci are the primary sites at which a marked telomeric ring-containing DNA is observed among wild-type and surviving cells lacking telomerase. Marked telomeric DNAs can be transferred to telomeres and form tandem arrays through Rad52-, Rad50-, and polymerase delta-mediated recombination. Moreover, increases of extrachromosomal telomeric and Y' rings were observed in telomerase-deficient cells. These results imply that telomeres can use looped-out telomeric rings to promote telomere-telomere recombination in telomerase-deficient Saccharomyces cerevisiae.