Loss of telomere equilibrium and associated chromosome-genomic instability might effectively promote tumour progression. Telomere function may have contrasting roles: inducing replicative senescence and promoting tumourigenesis and these roles may vary between cell types depending on the expression of the enzyme telomerase, the level of mutations induced, and efficiency/deficiency of related DNA repair pathways. We have identified an alternative telomere maintenance mechanism in mouse embryonic stem cells lacking telomerase RNA unit (mTER) with amplification of non-telomeric sequences adjacent to existing short stretches of telomere repeats. Our quest for identifying telomerase-independent or alternative mechanisms involved in telomere maintenance in mammalian cells has implicated the involvement of potential DNA repair factors in such pathways. We have reported earlier on the telomere equilibrium in scid mouse cells which suggested a potential role of DNA repair proteins in telomere maintenance in mammalian cells. Subsequently, studies by us and others have shown the association between the DNA repair factors and telomere function. Mice deficient in a DNA-break sensing molecule, PARP-1 (poly [ADP]-ribopolymerase), have increased levels of chromosomal instability associated with extensive telomere shortening. Ku80 null cells showed a telomere shortening associated with extensive chromosome end fusions, whereas Ku80+/- cells exhibited an intermediate level of telomere shortening. Inactivation of PARP-1 in p53-/- cells resulted in dysfunctional telomeres and severe chromosome instability leading to advanced onset and increased tumour incidence in mice. Interestingly, haploinsufficiency of PARP-1 in Ku80 null cells causes more severe telomere shortening and chromosome abnormalities compared to either PARP-1 or Ku80 single null cells and Ku80+/-PARP-/- mice develop spontaneous tumours. This overview will focus mainly on the role of DNA repair/recombination and DNA damage signalling molecules such as PARP-1, DNA-PKcs, Ku70/80, XRCC4 and ATM which we have been studying for the last few years. Because the maintenance of telomere function is crucial for genomic stability, our results will provide new insights into the mechanisms of chromosome instability and tumour formation.