Telomeres protect the ends of cellular chromosomes. We show here that infection with herpes simplex virus 1 (HSV-1) results in chromosomal structural aberrations at telomeres and the accumulation of telomere dysfunction-induced DNA damage foci (TIFs). At the molecular level, HSV-1 induces transcription of telomere repeat-containing RNA (TERRA), followed by the proteolytic degradation of the telomere protein TPP1 and loss of the telomere repeat DNA signal. The HSV-1-encoded E3 ubiquitin ligase ICP0 is required for TERRA transcription and facilitates TPP1 degradation. Small hairpin RNA (shRNA) depletion of TPP1 increases viral replication, indicating that TPP1 inhibits viral replication. Viral replication protein ICP8 forms foci that coincide with telomeric proteins, and ICP8-null virus failed to degrade telomere DNA signal. These findings suggest that HSV-1 reorganizes telomeres to form ICP8-associated prereplication foci and to promote viral genomic replication.