Telomeres are nucleoprotein structures that cap the ends of chromosomes and thereby protect their stability and integrity. In the presence of telomerase, the enzyme that synthesizes telomeric repeats, telomere length is controlled primarily by Rap1p, the budding yeast telomeric DNA binding protein which, through its C-terminal domain, nucleates a protein complex that limits telomere lengthening. In the absence of telomerase, telomeres shorten with every cell division, and eventually, cells enter replicative senescence. We have set out to identify the telomeric property that determines the replicative capacity of telomerase-deficient budding yeast. We show that in cells deficient for both telomerase and homologous recombination, replicative capacity is dependent on telomere length but not on the binding of Rap1p to the telomeric repeats. Strikingly, inhibition of Rap1p binding or truncation of the C-terminal tail of Rap1p in Kluyveromyces lactis and deletion of the Rap1p-recruited complex in Saccharomyces cerevisiae lead to a dramatic increase in replicative capacity. The study of the role of telomere binding proteins and telomere length on replicative capacity in yeast may have significant implications for our understanding of cellular senescence in higher organisms.