Alternative lengthening of telomeres (ALT) is a telomere-elongation mechanism observed in ∼15% of cancer subtypes. Current models indicate that ALT is mediated by homology-directed repair mechanisms. By disrupting MSH6 gene expression, we show that the deficiency of MutSα (MSH2/MSH6) DNA mismatch repair complex causes striking telomere hyperextension. Mechanistically, we show MutSα is specifically recruited to telomeres in ALT cells by associating with the proliferating-cell nuclear antigen (PCNA) subunit of the ALT telomere replisome. We also provide evidence that MutSα counteracts Bloom (BLM) helicase, which adopts a crucial role in stabilizing hyper-extended telomeres and maintaining the survival of MutSα-deficient ALT cancer cells. Lastly, we propose a model in which MutSα deficiency impairs heteroduplex rejection, leading to premature initiation of telomere DNA synthesis that coincides with an accumulation of telomere variant repeats (TVRs). These findings provide evidence that the MutSα DNA mismatch repair complex acts to restrain unwarranted ALT.