Yku70p/Yku80p, the yeast Ku protein homologue, is a DNA end-binding heterodimer involved in non-homologous end joining. It also binds to telomeres, where it plays an important role in the maintenance of telomeric DNA structure [1] [2] [3] [4] [5]. Ku protein, together with Rap1p, a telomeric DNA (TG(1-3) repeat)-binding protein, is also required to initiate transcriptional silencing, or telomere-position effect (TPE). Here, we provide evidence for a direct role of Ku in TPE, which is most likely to be in either the recruitment or activation of Sir4 protein at the telomere. Surprisingly, however, the essential role of Ku in TPE is to overcome the inhibitory effect of two Rap1p-interacting proteins, Rif1p and Rif2p, both of which also play an important role in telomere length regulation [6] [7]. Previous studies showed that Rif and Sir proteins compete for binding to the carboxyl terminus of Rap1p [7] [8] [9]. In the absence of this competition, for example, when RIF genes are mutated, Ku is no longer necessary for TPE, whereas the Rap1p carboxyl terminus is still absolutely required. We show that Rif1p is localized to telomeres, indicating that its inhibitory effect on TPE is direct. Our data implicate a role for Ku in the competition between Sir and Rif proteins for access to the telomeric array of Rap1p molecules, which results in a balance between telomeric silencing and telomere length control.