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Telomeres are heterochromatic structures at the ends of eukaryotic chromosomes. As other heterochromatin regions, telomeres are transcribed, from the subtelomeric region towards chromosome ends into the long non-coding RNA TERRA. Telomere transcription is a widespread phenomenon as it has been observed in species belonging to several kingdoms of the eukaryotic domain. TERRA is part of telomeric heterochromatin in addition to being present in the nucleoplasm. Here, we review the current knowledge of TERRA structure, biogenesis and turnover. In addition, we discuss presumed roles of this RNA during replication of telomeric DNA, heterochromatin formation and the regulation of telomerase.