Telomeres form the ends of linear chromosomes and protect these ends from being recognized as DNA double-strand breaks. Telomeric sequences are maintained in most cells by telomerase, a reverse transcriptase that adds TG-rich repeats to chromosome ends. In budding yeast, telomeres are organized in clusters at the nuclear periphery by interactions that depend on components of silent chromatin and the telomerase-binding factor yeast Ku (yKu). In this study, we examined whether the subnuclear localization of telomeres affects end maintenance. A telomere anchoring pathway involving the catalytic yeast telomerase subunits Est2, Est1, and Tlc1 is shown to be necessary for the perinuclear anchoring activity of Yku80 during S phase. Additionally, we identify the conserved Sad1-UNC-84 (SUN) domain protein Mps3 as the principal membrane anchor for this pathway. Impaired interference with Mps3 anchoring through overexpression of the Mps3 N terminus in a tel1 deletion background led to a senescence phenotype and to deleterious levels of subtelomeric Y' recombination. This suggests that telomere binding to the nuclear envelope helps protect telomeric repeats from recombination. Our results provide an example of a specialized structure that requires proper spatiotemporal localization to fulfill its biological role, and identifies a novel pathway of telomere protection.