Telomere lengths are maintained in many cancer cells by the ribonucleoprotein enzyme telomerase but can be further elongated by increasing telomerase activity through the overexpression of telomerase components. We report here that increased telomerase activity results in increased telomere length that eventually reaches a plateau, accompanied by the generation of telomere length heterogeneity and the accumulation of extrachromosomal telomeric repeat DNA, principally in the form of telomeric circles (t-circles). Telomeric DNA was observed in promyelocytic leukemia bodies, but no intertelomeric copying or telomere exchange events were identified, and there was no increase in telomere dysfunction-induced foci. These data indicate that human cells possess a mechanism to negatively regulate telomere length by trimming telomeric DNA from the chromosome ends, most likely by t-loop resolution to form t-circles. Additionally, these results indicate that some phenotypic characteristics attributed to alternative lengthening of telomeres (ALT) result from increased mean telomere length, rather than from the ALT mechanism itself.