The function of a stem-loop in telomerase RNA is linked to the DNA repair protein Ku.

The telomerase enzyme lengthens telomeres, an activity essential for chromosome stability in most eukaryotes. The enzyme is composed of a specialized reverse transcriptase and a template RNA. In Saccharomyces cerevisiae, overexpression of TLC1, the telomerase RNA gene, disrupts telomeric structure. The result is both shortened telomere length and loss of a special chromatin structure that normally silences telomere-proximal genes. Because telomerase function is not required for telomeric silencing, we postulated that the dominant-negative effect caused by overexpression of TLC1 RNA originates in a normal interaction between the RNA and an unknown telomeric factor important for silencing; the overexpressed RNA presumably continues to bind the factor and compromises its function. Here we show that a 48-nt stem-loop structure within the 1.3-kb TLC1 RNA is necessary and sufficient for disrupting telomeric silencing and shortening telomeres. Moreover, this short RNA sequence appears to function through an interaction with the conserved DNA end-binding protein Ku. We propose that, in addition to its roles in telomeric silencing, homologous recombination and non-homologous end-joining (NHEJ), S. cerevisiae Ku also helps to recruit or activate telomerase at the telomere through an interaction with this stem-loop of TLC1 RNA.