Telomere shortening rates must be regulated to prevent premature replicative senescence. TERRA R-loops become stabilized at critically short telomeres to promote their elongation through homology-directed repair (HDR), thereby counteracting senescence onset. Using a non-bias proteomic approach to identify telomere binding factors, we identified Npl3, an RNA-binding protein previously implicated in multiple RNA biogenesis processes. Using Chromatin- and RNA immunoprecipitation, we demonstrate that Npl3 interacts with TERRA and telomeres. Furthermore, we show that Npl3 associates to telomeres in an R-loop dependent manner, as changes in R-loop levels, e.g. at short telomeres, modulate the recruitment of Npl3 to chromosome ends. Through a series of genetic and biochemical approaches we demonstrate that Npl3 binds to TERRA and stabilizes R-loops at short telomeres, which in turn promotes HDR and prevents premature replicative senescence onset. This may have implications for diseases associated with excessive telomere shortening.