Dyskeratosis congenita (DC) is an inherited bone marrow failure syndrome characterized by cutaneous symptoms, including hyperpigmentation and nail dystrophy. Some forms of DC are caused by mutations in telomerase, the enzyme that counteracts telomere shortening, suggesting a telomere-based disease mechanism. However, mice with extensively shortened telomeres due to telomerase deficiency do not develop the characteristics of DC, raising questions about the etiology of DC and/or mouse models for human telomere dysfunction. Here we describe mice engineered to undergo telomere degradation due to the absence of the shelterin component POT1b. When combined with reduced telomerase activity, POT1b deficiency elicits several characteristics of DC, including hyperpigmentation and fatal bone marrow failure at 4–5 mo of age. These results provide experimental support for the notion that DC is caused by telomere dysfunction, and demonstrate that key aspects of a human telomere-based disease can be modeled in the mouse.