Telomeric TG-rich repeats and their associated proteins protect the termini of eukaryotic chromosomes from end-to-end fusions. Associated with the cap structure at yeast telomeres is a subtelomeric domain of heterochromatin, containing the silent information regulator (SIR) complex. The Ku70/80 heterodimer (yKu) is associated both with the chromosome end and with subtelomeric chromatin. Surprisingly, both yKu and the chromatin-associated Rap1 and SIR proteins are released from telomeres in a RAD9-dependent response to DNA damage. yKu is recruited rapidly to double-strand cuts, while low levels of SIR proteins are detected near cleavage sites at later time points. Consistently, yKu- or SIR-deficient strains are hypersensitive to DNA-damaging agents. The release of yKu from telomeric chromatin may allow efficient scanning of the genome for DNA strand breaks.