We performed single-molecule telomere length and telomere fusion analysis in patients at different stages of chronic lymphocytic leukemia (CLL). Our work identified the shortest telomeres ever recorded in primary human tissue, reinforcing the concept that there is significant cell division in CLL. Furthermore, we provide direct evidence that critical telomere shortening, dysfunction, and fusion contribute to disease progression. The frequency of short telomeres and fusion events increased with advanced disease, but importantly these were also found in a subset of early-stage patient samples, indicating that these events can precede disease progression. Sequence analysis of fusion events isolated from persons with the shortest telomeres revealed limited numbers of repeats at the breakpoint, subtelomeric deletion, and microhomology. Array-comparative genome hybridization analysis of persons displaying evidence of telomere dysfunction revealed large-scale genomic rearrangements that were concentrated in the telomeric regions; this was not observed in samples with longer telomeres. The telomere dynamics observed in CLL B cells were indistinguishable from that observed in cells undergoing crisis in culture after abrogation of the p53 pathway. Taken together, our data support the concept that telomere erosion and subsequent telomere fusion are critical in the progression of CLL and that this paradigm may extend to other malignancies.