In Saccharomyces cerevisiae, all ends of telomeric DNA contain telomeric repeats of (TG(1-3)), but the number and position of subtelomeric X and Y' repeat elements vary. Using chromatin immunoprecipitation and genome-wide analyses, we here demonstrate that the subtelomeric X and Y' elements have distinct structural and functional properties. Y' elements are transcriptionally active and highly enriched in nucleosomes, whereas X elements are repressed and devoid of nucleosomes. In contrast to X elements, the Y' elements also lack the classical hallmarks of heterochromatin, such as high Sir3 and Rap1 occupancy as well as low levels of histone H4 lysine 16 acetylation. Our analyses suggest that the presence of X and Y' elements govern chromatin structure and transcription activity at individual chromosome ends.