Telomere deprotection occurs during tumorigenesis and aging upon telomere shortening or loss of the telomeric shelterin component TRF2. Deprotected telomeres undergo changes in chromatin structure and elicit a DNA damage response (DDR) that leads to cellular senescence. The telomeric long noncoding RNA TERRA has been implicated in modulating the structure and processing of deprotected telomeres. Here, we characterize the human TERRA transcriptome at normal and TRF2-depleted telomeres and demonstrate that TERRA upregulation is occurring upon depletion of TRF2 at all transcribed telomeres. TRF2 represses TERRA transcription through its homodimerization domain, which was previously shown to induce chromatin compaction and to prevent the early steps of DDR activation. We show that TERRA associates with SUV39H1 H3K9 histone methyltransferase, which promotes accumulation of H3K9me3 at damaged telomeres and end-to-end fusions. Altogether our data elucidate the TERRA landscape and defines critical roles for this RNA in the telomeric DNA damage response.