Telomere repeats in budding yeast are maintained at a constant average length and protected (‘capped’), in part, by mechanisms involving the TG13 repeat-binding protein Rap1. However, metazoan telomere repeats (T2AG3) can be maintained in yeast through a Rap1-independent mechanism. Here, we examine the dynamics of capping and telomere formation at an induced DNA double-strand break flanked by varying lengths of T2AG3 repeats.We show that a 60-bp T2AG3 repeat array induces a transient G2/M checkpoint arrest, but is rapidly elongated by telomerase to generate a stable T2AG3/TG1–3 hybrid telomere. In contrast, a 230-bp T2AG3 array induces neither G2/M arrest nor telomerase elongation. This capped state requires the T2AG3-binding protein Tbf1, but is independent of two Tbf1-interacting factors, Vid22 and Ygr071c. Arrays of binding sites for three other subtelomeric or Myb/SANT domain-containing proteins fail to display a similar endprotection effect, indicating that Tbf1 capping is an evolved function. Unexpectedly, we observed strong telomerase association with non-telomeric ends, whose elongation is blocked by a Mec1-dependent mechanism, apparently acting at the level of Cdc13 binding.