TRF1, a component of the shelterin complex, plays a key role in both telomerase-dependent telomere maintenance and alternative lengthening of telomeres, the latter also known as ALT. Characteristics of ALT cells include C-circles and ALT-associated PML bodies, referred to as APBs. The function of TRF1 is tightly regulated by post-translational modification including phosphorylation, however TRF1 phosphorylation sites have yet to be fully characterized. Here we report a novel TRF1 phosphorylation site threonine 271. We show that a nonphosphorylatable mutation of T271A impairs TRF1 binding to telomeric DNA in vivo and renders TRF1 defective in inhibiting telomerase-dependent telomere elongation. On the other hand, TRF1 carrying a phosphomimic mutation of T271D is competent in not only binding to telomeric DNA but also inhibiting telomerase-mediated telomere lengthening. These results suggest that TRF1 phosphorylation on T271 negatively regulates telomerase-mediated telomere maintenance. We find that in telomerase-negative ALT cells, TRF1 carrying either a T271A or T271D mutation is able to promote C-circle production but fails to support APB formation. These results suggest that TRF1 phosphorylation on T271 is necessary for APB formation but dispensable for C-circle production. These results further imply that APB formation can be mechanistically separated from C-circle production.