telomere repeat encoding rna referred to as terra has been identified as a potential component of yeast and mammalian telomeres we show here that terra rna interacts with several telomere associated proteins including telomere repeat factors 1 trf1 and 2 trf2 subunits of the origin recognition complex orc heterochromatin protein 1 hp1 histone h3 trimethyl k9 h3 k9me3 and members of the dna damage sensing pathway sirna depletion of terra caused an increase in telomere dysfunction induced foci aberrations in metaphase telomeres and a loss of histone h3 k9me3 and orc at telomere repeat dna previous studies found that trf2 amino terminal gar domain recruited orc to telomeres we now show that terra rna can interact directly with the trf2 gar and orc1 to form a stable ternary complex we conclude that terra facilitates trf2 interaction with orc and plays a central role in telomere structural maintenance and heterochromatin formation.