Reactivation of telomerase reverse transcriptase (TERT) expression is found in more than 85% of human cancers. The remaining cancers rely on the alternative lengthening of telomeres (ALT), a recombination-based mechanism for telomere-length maintenance. Prevalence of TERT reactivation over the ALT mechanism was linked to secondary TERT function unrelated to telomere length maintenance. To characterize this non-canonical function, we created a panel of ALT cells with recombinant expression of TERT and TERT variants: TERT-positive ALT cells showed higher tolerance to genotoxic insults compared with their TERT-negative counterparts. We identified telomere synthesis-defective TERT variants that bestowed similar genotoxic stress tolerance, indicating that telomere synthesis activity is dispensable for this survival phenotype. TERT expression improved the kinetics of double-strand chromosome break repair and reduced DNA damage-related nuclear division abnormalities, a phenotype associated with ALT tumors. Despite this reduction in cytological abnormalities, surviving TERT-positive ALT cells were found to have gross chromosomal instabilities. We sorted TERT-positive cells with cytogenetic changes and followed their growth. We found that the chromosome-number changes persisted, and TERT-positive ALT cells surviving genotoxic events propagated through subsequent generations with new chromosome numbers. Our data confirm that telomerase expression protects against double-strand DNA (dsDNA)-damaging events, and show that this protective function is uncoupled from its role in telomere synthesis. TERT expression promotes oncogene-transformed cell growth by reducing the inhibitory effects of cell-intrinsic (telomere attrition) and cell-extrinsic (chemical- or metabolism-induced genotoxic stress) challenges. These data provide the impetus to develop new therapeutic interventions for telomerase-positive cancers through simultaneous targeting of multiple telomerase activities.