Telomeres are specialized nucleoprotein structures that stabilize the ends of linear eukaryotic chromosomes. In mammalian cells, abrogation of telomeric repeat binding factor TRF2 or DNA-dependent protein kinase (DNA-PK) activity causes end-to-end chromosomal fusion, thus establishing an essential role for these proteins in telomere function. Here we show that TRF2-mediated end-capping occurs after telomere replication. The postreplicative requirement for TRF2 and DNA-PKcs, the catalytic subunit of DNA-PK, is confined to only half of the telomeres, namely, those that were produced by leading-strand DNA synthesis. These results demonstrate a crucial difference in postreplicative processing of telomeres that is linked to their mode of replication.