Coats plus (CP) can be caused by mutations in the CTC1 component of CST, which promotes polymerase α (polα)/primase-dependent fill-in throughout the genome and at telomeres. The cellular pathology relating to CP has not been established. We identified a homozygous POT1 S322L substitution (POT1(CP)) in two siblings with CP. POT1(CP)induced a proliferative arrest that could be bypassed by telomerase. POT1(CP)was expressed at normal levels, bound TPP1 and telomeres, and blocked ATR signaling. POT1(CP)was defective in regulating telomerase, leading to telomere elongation rather than the telomere shortening observed in other telomeropathies. POT1(CP)was also defective in the maintenance of the telomeric C strand, causing extended 3' overhangs and stochastic telomere truncations that could be healed by telomerase. Consistent with shortening of the telomeric C strand, metaphase chromosomes showed loss of telomeres synthesized by leading strand DNA synthesis. We propose that CP is caused by a defect in POT1/CST-dependent telomere fill-in. We further propose that deficiency in the fill-in step generates truncated telomeres that halt proliferation in cells lacking telomerase, whereas, in tissues expressing telomerase (e.g., bone marrow), the truncations are healed. The proposed etiology can explain why CP presents with features distinct from those associated with telomerase defects (e.g., dyskeratosis congenita).