Shelterin is an essential telomeric protein complex that prevents DNA damage signaling and DNA repair at mammalian chromosome ends. Here we report on the role of the TRF2-interacting factor Rap1, a conserved shelterin subunit of unknown function. We removed Rap1 from mouse telomeres either through gene deletion or by replacing TRF2 with a mutant that does not bind Rap1. Rap1 was dispensable for the essential functions of TRF2—repression of ATM kinase signaling and nonhomologous end joining (NHEJ)—and mice lacking telomeric Rap1 were viable and fertile. However, Rap1 was critical for the repression of homology-directed repair (HDR), which can alter telomere length. The data reveal that HDR at telomeres can take place in the absence of DNA damage foci and underscore the functional compartmentalization within shelterin.