Telomeres are specialized DNA/protein structures that act as protective caps to prevent end fusion events and to distinguish the chromosome ends from double-strand breaks. We report that TRF1 and Ku form a complex at the telomere. The Ku and TRF1 complex is a specific high-affinity interaction, as demonstrated by several in vitro methods, and exists in human cells as determined by coimmunoprecipitation experiments. Ku does not bind telomeric DNA directly but localizes to telomeric repeats via its interaction with TRF1. Primary mouse embryonic fibroblasts that are deficient for Ku80 accumulated a large percentage of telomere fusions, establishing that Ku plays a critical role in telomere capping in mammalian cells. We propose that Ku localizes to internal regions of the telomere via a high-affinity interaction with TRF1. Therefore, Ku acts in a unique way at the telomere to prevent end joining.