Werner syndrome (WS) is marked by early onset of features resembling aging, and is caused by loss of the RecQ family DNA helicase WRN. Precisely how loss of WRN leads to the phenotypes of WS is unknown. Cultured WS fibroblasts shorten their telomeres at an increased rate per population doubling and the premature senescence this loss induces can be bypassed by telomerase. Here we show that WRN co-localizes with telomeric factors in telomerase-independent immortalized human cells, and further that the budding yeast RecQ family helicase Sgs1p influences telomere metabolism in yeast cells lacking telomerase. Telomerase-deficient sgs1 mutants show increased rates of growth arrest in the G2/M phase of the cell cycle as telomeres shorten. In addition, telomerase-deficient sgs1 mutants have a defect in their ability to generate survivors of senescence that amplify telomeric TG1-3 repeats, and SGS1 functions in parallel with the recombination gene RAD51 to generate survivors. Our findings indicate that Sgs1p and WRN function in telomere maintenance, and suggest that telomere defects contribute to the pathogenesis of WS and perhaps other RecQ helicase diseases.