Shelterin, the telomeric protein complex, plays a crucial role in telomere homeostasis. In fission yeast, telomerase is recruited to chromosome ends by the shelterin component Tpz1 and its binding partner Ccq1, where telomerase binds to the 3' overhang to add telomeric repeats. Recruitment is initiated by the interaction of Ccq1 with the telomerase subunit Est1. However, how telomerase is released following elongation remains to be established. Here, we show that Ccq1 also has a role in the suppression of telomere elongation, when coupled with the Clr4 histone H3 methyl-transferase complex and the Clr3 histone deacetylase and nucleosome remodelling complex, SHREC. We have dissected the functions of Ccq1 by establishing a Ccq1-Est1 fusion system, which bypasses the telomerase recruitment step. We demonstrate that Ccq1 forms two distinct complexes for positive and negative telomerase regulation, with Est1 and Clr3 respectively. The negative form of Ccq1 promotes dissociation of Ccq1-telomerase from Tpz1, thereby restricting local telomerase activity. The Clr4 complex also has a negative regulation activity with Ccq1, independently of SHREC. Thus, we propose a model in which Ccq1-Est1 recruits telomerase to mediate telomere extension, whilst elongated telomeric DNA recruits Ccq1 with the chromatin-remodelling complexes, which in turn releases telomerase from the telomere.