Instead of employing telomerases to safeguard chromosome ends, dipteran species maintain their telomeres by transposition of telomeric-specific retrotransposons (TRs): inDrosophila, these areHeT-A,TART, andTAHRE. Previous studies have shown how these TRs create tandem repeats at chromosome ends, but the exact mechanism controlling TR transcription has remained unclear. Here we report the identification of multiple subunits of the transcription cofactor Mediator complex and transcriptional factors Scalloped (Sd, the TEAD homolog in flies) and E2F1-Dp as novel regulators of TR transcription and telomere length inDrosophila. Depletion of multiple Mediator subunits, Dp, or Sd increased TR expression and telomere length, while over-expressing E2F1-Dp or knocking down the E2F1 regulator Rbf1 (Retinoblastoma-family protein 1) stimulated TR transcription, with Mediator and Sd affecting TR expression through E2F1-Dp. The CUT&RUN analysis revealed direct binding of CDK8, Dp, and Sd to telomeric repeats. These findings highlight the essential role of the Mediator complex in maintaining telomere homeostasis by regulating TR transcription through E2F1-Dp and Sd, revealing the intricate coupling of TR transcription with the host cell-cycle machinery, thereby ensuring chromosome end protection and genomic stability during cell division.