We have found that the Dna2 helicase-nuclease, thought to be involved in maturation of Okazaki fragments, is a component of telomeric chromatin. We demonstrate a dynamic localization of Dna2p to telomeres that suggests a dual role for Dna2p, one in telomere replication and another, unknown function, perhaps in telomere capping. Both chromatin immunoprecipitation (ChIP) and immunofluorescence show that Dna2p associates with telomeres but not bulk chromosomal DNA in G(1) phase, when there is no telomere replication and the telomere is transcriptionally silenced. In S phase, there is a dramatic redistribution of Dna2p from telomeres to sites throughout the replicating chromosomes. Dna2p is again localized to telomeres in late S, where it remains through G(2) and until the next S phase. Telomeric localization of Dna2p required Sir3p, since the amount of Dna2p found at telomeres by two different assays, one-hybrid and ChIP, is severely reduced in strains lacking Sir3p. The Dna2p is also distributed throughout the nucleus in cells growing in the presence of double-strand-break-inducing agents such as bleomycin. Finally, we show that Dna2p is functionally required for telomerase-dependent de novo telomere synthesis and also participates in telomere lengthening in mutants lacking telomerase.