In Saccharomyces cerevisiae, Cdc13p is a single-stranded TG(1-3) DNA binding protein that protects telomeres and maintains telomere length. A mutant allele of CDC13, cdc13-1, causes accumulation of single-stranded TG(1-3) DNA near telomeres along with a G(2)/M cell cycle arrest at non-permissive temperatures. We report here that when the single-stranded TG(1-3) DNA is masked by its binding proteins, such as S. cerevisiae Gbp2p or Schizosaccharomyces pombe Tcg1, the growth arrest phenotype of cdc13-1 is rescued. Mutations on Gbp2p that disrupt its binding to the single-stranded TG(1-3) DNA render the protein unable to complement the defects of cdc13-1. These results indicate that the presence of a single-stranded TG(1-3) tail in cdc13-1 cells serves as the signal for the cell cycle checkpoint. Moreover, the binding activity of Gbp2p to single-stranded TG(1-3) DNA appears to be associated with its ability to restore the telomere-lengthening phenotype in cdc13-1 cells. These results indicate that Gbp2p is involved in modulating telomere length.