Loss of telomere protection causes natural chromosome ends to become recognized by DNA-damage response and repair proteins. These events result in ligation of chromosome ends with dysfunctional telomeres, thereby causing chromosomal aberrations on cell division. The control of these potentially dangerous events at deprotected chromosome ends with their unique telomeric chromatin configuration is poorly understood. In particular, it is unknown to what extent bulky modification of telomeric chromatin is involved. Here we show that uncapped telomeres accumulate ubiquitylated histone H2A in a manner dependent on the E3 ligase RNF8. The ability of RNF8 to ubiquitylate telomeric chromatin is associated with its capacity to facilitate accumulation of both 53BP1 and phospho-ATM at uncapped telomeres and to promote non-homologous end-joining of deprotected chromosome ends. In line with the detrimental effect of RNF8 on uncapped telomeres, depletion of RNF8, as well as of the E3 ligase RNF168, reduces telomere-induced genome instability. This indicates that, besides suppressing tumorigenesis by mediating repair of DNA double-strand breaks, RNF8 and RNF168 might enhance cancer development by aggravating telomere-induced genome instability.