The Werner syndrome protein (WRN) suppresses the loss of telomeres replicated by lagging-strand synthesis by a yet to be defined mechanism. Here, we show that whereas either WRN or the Bloom syndrome helicase (BLM) stimulates DNA polymerase ␦ progression across telomeric G-rich repeats, only WRN promotes sequential strand displacement synthesis and FEN1 cleavage, a critical step in Okazaki fragment maturation, at these sequences. Helicase activity, as well as the conserved winged-helix (WH) motif and the helicase and RNase D C-terminal (HRDC) domain play important but distinct roles in this process. Remarkably, WRN also influences the formation of FEN1 cleavage products during strand displacement on a nontelomeric substrate, suggesting that WRN recruitment and cooperative interaction with FEN1 during lagging-strand synthesis may serve to regulate sequential strand displacement and flap cleavage at other genomic sites. These findings define a biochemical context for the physiological role of WRN in maintaining genetic stability.