DNA polymerase theta (POLQ) is a principal component of the alternative non-homologous end-joining (ANHEJ) DNA repair pathway that ligates DNA double-strand breaks. Utilizing independent models of POLQ insufficiency during telomere-driven crisis, we found that  cells are resistant to crisis-induced growth deceleration despite sustaining inter-chromosomal telomere fusion frequencies equivalent to wild-type (WT) cells. We recorded longer telomeres in than WT cells pre- and post-crisis, notwithstanding elevated total telomere erosion and fusion rates. cells emerging from crisis exhibited reduced incidence of clonal gross chromosomal abnormalities in accordance with increased genetic heterogeneity. High-throughput sequencing of telomere fusion amplicons from POLQ-deficient cells revealed significantly raised frequencies of inter-chromosomal fusions with correspondingly depreciated intra-chromosomal recombinations. Long-range interactions culminating in telomere fusions with centromere alpha-satellite repeats, as well as expansions in HSAT2 and HSAT3 satellite and contractions in ribosomal DNA repeats, were detected in cells. In conjunction with the expanded telomere lengths of cells, these results indicate a hitherto unrealized capacity of POLQ for regulation of repeat arrays within the genome. Our findings uncover novel considerations for the efficacy of POLQ inhibitors in clinical cancer interventions, where potential genome destabilizing consequences could drive clonal evolution and resistant disease.