Maintenance of telomere length and function is critical for the efficient proliferation of eukaryotic cells. Here, we examine the interactions between telomere dysfunction and p53 in cells and organs of telomerase-deficient mice. Coincident with severe telomere shortening and associated genomic instability, p53 is activated, leading to growth arrest and/or apoptosis. Deletion of p53 significantly attenuated the adverse cellular and organismal effects of telomere dysfunction, but only during the earliest stages of genetic crisis. Correspondingly, the loss of telomere function and p53 deficiency cooperated to initiate the transformation process. Together, these studies establish a key role for p53 in the cellular response to telomere dysfunction in both normal and neoplastic cells, question the significance of crisis as a tumor suppressor mechanism, and identify a biologically relevant stage of advanced crisis, termed genetic catastrophe.