It is well established that short telomeres activate an ATM-driven DNA damage response that leads to senescence in terminally differentiated cells. However, technical limitations have hampered our understanding of how telomere shortening is signaled in human stem cells. Here, we show that telomere attrition induces ssDNA accumulation (G-strand) at telomeres in human pluripotent stem cells (hPSCs), but not in their differentiated progeny. This led to a unique role for ATR in the response of hPSCs to telomere shortening that culminated in an extended S/G2 cell cycle phase and a longer period of mitosis, which was associated with aneuploidy and mitotic catastrophe. Loss of p53 increased resistance to death, at the expense of increased mitotic abnormalities in hPSCs. Taken together, our data reveal an unexpected dominant role of ATR in hPSCs, combined with unique cell cycle abnormalities and, ultimately, consequences distinct from those observed in their isogenic differentiated counterparts.