Telomeres are transcribed into telomeric repeat-containing RNA (TERRA), large, heterogeneous, noncoding transcripts which form part of the telomeric heterochromatin. Despite a large number of functions that have been ascribed to TERRA, little is known about its biogenesis. Here, we present the first comprehensive analysis of the molecular structure of TERRA. We identify biochemically distinct TERRA complexes, and we describe TERRA regulation during the cell cycle. Moreover, we demonstrate that TERRA 5' ends contain 7-methylguanosine cap structures and that the poly(A) tail, present on a fraction of TERRA transcripts, contributes to their stability. Poly(A)(-) TERRA, but not poly(A)(+) TERRA, is associated with chromatin, possibly reflecting distinct biological roles of TERRA ribonucleoprotein complexes. In support of this idea, poly(A)(-) and poly(A)(+) TERRA molecules end with distinct sequence registers. We also determine that the bulk of 3'-terminal UUAGGG repeats have an average length of 200 bases, indicating that the length heterogeneity of TERRA likely stems from its subtelomeric regions. Finally, we find that TERRA is regulated during the cell cycle, being lowest in late S phase and peaking in early G(1). Our analyses offer the basis for investigating multiple regulatory pathways that affect TERRA synthesis, processing, turnover, and function.