Mammalian CST (CTC1-STN1-TEN1) complex fulfills numerous functions including rescue of the stalled replication forks and termination of telomerase action. In fission yeast lacking the CTC1 ortholog, the Stn1-Ten1 complex restricts telomerase action via its sumoylation-mediated interaction with Tpz1 TPP1 . We identify a small ubiquitin-like modifier (SUMO)-interacting motif (SIM) in the carboxyl-terminal part of Stn1 and show that this domain is crucial for SUMO and Tpz1-SUMO interactions. Point mutations in the SIM (Stn1-226) lead to telomere elongation, impair Stn1-Ten1 recruitment to telomeres, and enhance telomerase binding, revealing that Stn1 SIM domain contributes to the inhibition of telomerase activity at chromosome ends. Our results suggest that Stn1-Ten1 promotes DNA synthesis at telomeres to limit single-strand DNA accumulation. We further demonstrate that Stn1 functions in the replication of telomeric and subtelomeric regions in a Taz1-independent manner. Genetic analysis reveals that misregulation of origin firing and/or telomerase inhibition circumvents the replication defects of the  stn1-226  mutant. Together, our results show that the Stn1-Ten1 complex has a dual function at telomeres by limiting telomerase action and promoting chromosome end replication.