At critically short telomeres TERRA RNA-DNA hybrids become stabilized and drive homology-directed repair (HDR) to delay replicative senescence. However, even at long- and intermediate-length telomeres, not subject to HDR, transient TERRA RNA-DNA hybrids form, suggestive of additional roles. Here, we report that hybrids at telomeres prevent resection by the Exo1 nuclease when telomeres become non-functional. We employed the well-characterized cdc13-1 allele, where telomere resection can be induced in a temperature dependent manner, to demonstrate that ssDNA generation at telomeres is either prevented or augmented when RNA-DNA hybrids are stabilized or destabilized, respectively. The viability of cdc13-1 cells is affected by the presence or absence of hybrids accordingly. These results give insights into an additional role of TERRA at dysfunctional telomeres suggesting that it not only affects replicative senescence rates through HDR activation at critically short telomeres, but may also affect resection rates at intermediate length telomeres in pre-senescent cells.