Telomeric repeat-containing RNA (TERRA) has been implicated in the control of heterochromatin and telomerase. We demonstrate that yeast TERRA is regulated by telomere-binding proteins in a chromosome-end-specific manner that is dependent on subtelomeric repetitive DNA elements. At telomeres that contain only X-elements, the Rap1 carboxy-terminal domain recruits the Sir2/3/4 and Rif1/2 complexes to repress transcription in addition to promoting Rat1-nuclease-dependent TERRA degradation. At telomeres that contain Y' elements, however, Rap1 represses TERRA through recruitment of Rif1 and Rif2. Our work emphasizes the importance of subtelomeric DNA in the control of telomeric protein composition and telomere transcription.