Telomere maintenance critically depends on the distinct activities of telomerase, which adds telomeric repeats to solve the end replication problem, and RTEL1, which dismantles DNA secondary structures at telomeres to facilitate replisome progression. Here, we establish that reversed replication forks are a pathological substrate for telomerase and the source of telomere catastrophe in Rtel1 cells. Inhibiting telomerase recruitment to telomeres, but not its activity, or blocking replication fork reversal through PARP1 inhibition or depleting UBC13 or ZRANB3 prevents the rapid accumulation of dysfunctional telomeres in RTEL1-deficient cells. In this context, we establish that telomerase binding to reversed replication forks inhibits telomere replication, which can be mimicked by preventing replication fork restart through depletion of RECQ1 or PARG. Our results lead us to propose that telomerase inappropriately binds to and inhibits restart of reversed replication forks within telomeres, which compromises replication and leads to critically short telomeres.