In the budding yeast Saccharomyces cerevisiae, the structure and function of telomeres are maintained by binding proteins, such as Cdc13-Stn1-Ten1 (CST), Yku, and the telomerase complex. Like CST and Yku, telomerase also plays a role in telomere protection or capping. Unlike CST and Yku, however, the underlying molecular mechanism of telomerase-mediated telomere protection remains unclear. In this study, we employed both the CDC13-EST1 fusion gene and the separation-of-function allele est1-D514A to elucidate that Est1 provided a telomere protection pathway that was independent of both the CST and Yku pathways. Est1's ability to convert single-stranded telomeric DNA into a G quadruplex was required for telomerase-mediated telomere protection function. Additionally, Est1 maintained the integrity of telomeres by suppressing the recombination of subtelomeric Y' elements. Our results demonstrate that one major functional role that Est1 brings to the telomerase complex is the capping or protection of telomeres.