Alternative lengthening of telomere (ALT) tumors maintain telomeres by a telomerase-independent mechanism and are characterized by a nuclear structure called the ALT-associated PML body (APB). TRF2 is a component of a telomeric DNA/protein complex called shelterin. However, TRF2 function in ALT cells remains elusive. In telomerase-positive tumor cells, TRF2 inactivation results in telomere de-protection, activation of ATM, and consequent induction of p53-dependent apoptosis. We show that in ALT cells this sequence of events is different. First, TRF2 inactivation/silencing does not induce cell death in p53-proficient ALT cells, but rather triggers cellular senescence. Second, ATM is constitutively activated in ALT cells and colocalizes with TRF2 into APBs. However, it is only following TRF2 silencing that the ATM target p53 is activated. In this context, PML is indispensable for p53-dependent p21 induction. Finally, we find a substantial loss of telomeric DNA upon stable TRF2 knockdown in ALT cells. Overall, we provide insight into the functional consequences of shelterin alterations in ALT cells.