ATRX is a chromatin remodelling factor found at a wide range of tandemly repeated sequences including telomeres (TTAGGG)n. ATRX mutations are found in nearly all tumours that maintain their telomeres via the alternative lengthening of telomere (ALT) pathway, and ATRX is known to suppress this pathway. Here, we show that recruitment of ATRX to telomeric repeats depends on repeat number, orientation and, critically, on repeat transcription. Importantly, the transcribed telomeric repeats form RNA–DNA hybrids (R-loops) whose abundance correlates with the recruitment of ATRX. Here, we show loss of ATRX is also associated with increased R-loop formation. Our data suggest that the presence of ATRX at telomeres may have a central role in suppressing deleterious DNA secondary structures that form at transcribed telomeric repeats, and this may account for the increased DNA damage, stalling of replication and homology-directed repair previously observed upon loss of ATRX function.