The Yku heterodimer from Saccharomyces cerevisiae, comprising Yku70p and Yku80p, is involved in the maintenance of a normal telomeric DNA end structure and is an essential component of nonhomologous end joining (NHEJ). To investigate the role of the Yku70p subunit in these two different pathways, we generated C-terminal deletions of the Yku70 protein and examined their ability to complement the phenotypes of a yku70(-) strain. Deleting only the 30 C-terminal amino acids of Yku70p abolishes Yku DNA binding activity and causes a yku(-) phenotype; telomeres are shortened, and NHEJ is impaired. Using conditions in which at least as much mutant protein as full-length protein is normally detectable in cell extracts, deleting only 25 C-terminal amino acids of Yku70p results in no measurable effect on DNA binding of the Yku protein, and the cells are fully proficient for NHEJ. Nevertheless, these cells display considerably shortened telomeres, and significant amounts of single-stranded overhangs of the telomeric guanosine-rich strands are observed. Co-overexpression of this protein with Yku80p could rescue some but not all of the telomere-related phenotypes. Therefore, the C-terminal domain in Yku70p defines at least one domain that is especially involved in telomere maintenance but not in NHEJ.