Many repair and recombination proteins play essential roles in telomere function and chromosome stability, notwithstanding the role of telomeres in "hiding" chromosome ends from DNA repair and recombination. Among these are XPF and ERCC1, which form a structure-specific endonuclease known for its essential role in nucleotide excision repair and is the subject of considerable interest in studies of recombination. In contrast to observations in mammalian cells, we observe no enhancement of chromosomal instability in Arabidopsis plants mutated for either XPF (AtRAD1) or ERCC1 (AtERCC1) orthologs, which develop normally and show wild-type telomere length. However, in the absence of telomerase, mutation of either of these two genes induces a significantly earlier onset of chromosomal instability. This early appearance of telomere instability is not due to a general acceleration of telomeric repeat loss, but is associated with the presence of dicentric chromosome bridges and cytologically visible extrachromosomal DNA fragments in mitotic anaphase. Such extrachromosomal fragments are not observed in later-generation single-telomerase mutant plants presenting similar frequencies of anaphase bridges. Extensive FISH analyses show that these DNAs are broken chromosomes and correspond to two specific chromosome arms. Analysis of the Arabidopsis genome sequence identified two extensive blocks of degenerate telomeric repeats, which lie at the bases of these two arms. Our data thus indicate a protective role of ERCC1/XPF against 3' G-strand overhang invasion of interstitial telomeric repeats. The fact that the Atercc1 (and Atrad1) mutants dramatically potentiate levels of chromosome instability in Attert mutants, and the absence of such events in the presence of telomerase, have important implications for models of the roles of recombination at telomeres and is a striking illustration of the impact of genome structure on the outcomes of equivalent recombination processes in different organisms.