Telomere dysfunction is closely associated with human diseases such as cancer and ageing. Inappropriate changes in telomere length and/or structure result in telomere dysfunction. Telomeres have been considered to be transcriptionally silent, but it was recently demonstrated that mammalian telomeres are transcribed into telomeric repeat-containing RNA (TERRA). TERRA, a long non-coding RNA, participates in the regulation of telomere length, telomerase activity and heterochromatinization. The correct regulation of telomere length may be crucial to telomeric homeostasis and functions. Here, we summarize recent advances in our understanding of the crucial role of TERRA in the maintenance of telomere length, with focus on the variety of mechanisms by which TERRA is involved in the regulation of telomere length. This review aims to enable further understanding of how TERRA-targeted drugs can target telomere-related diseases.