Telomerase, a ribonucleoprotein, is responsible for the maintenance of eukaryotic genome integrity by replicating the ends of chromosomes. The core enzyme comprises the conserved protein TERT and an RNA subunit (TER) that, in contrast, displays large variations in size and structure. Here, we report the identification of the telomerase RNA from thermotolerant yeast Hansenula polymorpha (HpTER) and describe its structural features. We show further that the H. polymorpha telomerase reverse transcribes the template beyond the predicted boundary and adds a nontelomeric dT in vitro. Sequencing of the chromosomal ends revealed that this nucleotide is specifically present as a terminal nucleotide at the 3' end of telomeres. Mutational analysis of HpTER confirmed that the incorporation of dT functions to limit telomere length in this species.