Replicative senescence is triggered by short unprotected telomeres that arise in the absence of telomerase. In addition, telomeres are known as difficult regions to replicate due to their repetitive G-rich sequence prone to secondary structures and tightly bound non-histone proteins. Here we review accumulating evidence that telomerase inactivation in yeast immediately unmasks the problems associated with replication stress at telomeres. Early after telomerase inactivation, yeast cells undergo successive rounds of stochastic DNA damages and become dependent on recombination for viability long before the bulk of telomeres are getting critically short. The switch from telomerase to recombination to repair replication stress-induced damage at telomeres creates telomere instability, which may drive further genomic alterations and prepare the ground for telomerase-independent immortalization observed in yeast survivors and in 15% of human cancer.