To assess telomerase as a cancer therapeutic target and determine adaptive mechanisms to telomerase inhibition, we modeled telomerase reactivation and subsequent extinction in T cell lymphomas arising in Atm^−/− mice engineered with an inducible telomerase reverse transcriptase allele. Telomerase reactivation in the setting of telomere dysfunction enabled full malignant progression with alleviation of telomere dysfunction-induced checkpoints. These cancers possessed copy number alterations targeting key loci in human T cell lymphomagenesis. Upon telomerase extinction, tumor growth eventually slowed with reinstatement of telomere dysfunction-induced checkpoints, yet growth subsequently resumed as tumors acquired alternative lengthening of telomeres (ALT) and aberrant transcriptional networks centering on mitochondrial biology and oxidative defense. ALT+ tumors acquired amplification/overexpression of PGC-1β, a master regulator of mitochondrial biogenesis and function, and they showed marked sensitivity to PGC-1β or SOD2 knockdown. Genetic modeling of telomerase extinction reveals vulnerabilities that motivate coincidental inhibition of mitochondrial maintenance and oxidative defense mechanisms to enhance antitelomerase cancer therapy.