In human somatic cells or yeast cells lacking telomerase, telomeres are shortened upon each cell division. This gradual shortening of telomeres eventually leads to senescence. However, a small population of telomerase-deficient cells can survive by bypassing senescence through the activation of alternative recombination pathways to maintain their telomeres. Although genes involved in telomere recombination have been identified, mechanisms that trigger telomere recombination are less known. The THO (suppressor of the transcriptional defects of Hpr1 mutants by overexpression) complex is involved in transcription elongation and mRNA export. Here we demonstrate that mutations in THO complex components can stimulate early senescence and type II telomere recombination in cells lacking telomerase. The accumulation of telomere-associated noncoding telomere repeat-containing RNA (TERRA) is required for the observed telomere effects in THO complex mutants; reduced transcriptional efficiency, or overexpression of RNase H or C(1-3)A RNA can severely impair the type II telomere recombination. The results highlight a unique function for telomere-associated TERRA, in the formation of type II survivors. Moreover, because TERRA is a long noncoding RNA, these results reveal a function for long noncoding RNA in regulating recombination.