Schizosaccharomyces pombe cells lacking the catalytic subunit of telomerase (encoded by trt1+) lose telomeric DNA and enter crisis, but rare survivors arise with either circular or linear chromosomes. Survivors with linear chromosomes have normal growth rates and morphology, but those with circular chromosomes have growth defects and are enlarged. We report the global gene-expression response of S. pombe to loss of trt1+. Survivors with linear chromosomes had expression profiles similar to cells with native telomeres, whereas survivors with circular chromosomes showed continued upregulation of core environmental stress response (CESR) genes. In addition, survivors with circular chromosomes had altered expression of 51 genes compared to survivors with linear chromosomes, providing an expression signature. S. pombe progressing through crisis displayed two waves of altered gene expression. One coincided with crisis and consisted of around 110 genes, 44% of which overlapped with the CESR. The second was synchronized with the emergence of survivors and consisted of a single class of open reading frames (ORFs) with homology both to RecQ helicases and to dh repeats at centromeres targeted for heterochromatin formation via an RNA interference (RNAi) mechanism. Accumulation of transcript from the ORF was found not only in trt1- cells, but also in dcr1- and ago1- RNAi mutants, suggesting that RNAi may control its expression. These results demonstrate a correlation between a state of cellular stress, short telomeres and growth defects in cells with circular chromosomes. A putative new RecQ helicase was expressed as survivors emerged and appears to be transcriptionally regulated by RNAi, suggesting that this mechanism operates at telomeres.