<p> Telomere dysfunction describes the catastrophic damage at telomeres, which often leads to genomic instability at the cellular level. There is rising evidence showing that telomere dysfunction also influences the extracellular environment with the inflammatory response. However, little is known about the molecular mechanism of this dysfunctional telomere-associated inflammation. In this dissertation, we identified extracellular forms of Telomeric repeat-containing RNA (TERRA), and demonstrated it might play a role in mediating the crosstalk of telomere dysfunction and inflammation. We found this cell-free TERRA (cfTERRA) is present in mouse tumor and embryonic brain tissue, as well as in human tissue culture cell lines using RNA in situ hybridization. RNA-seq analyses revealed TERRA to be among the most highly represented transcripts in extracellular fractions derived from both normal and cancer patient blood plasma. By characterizing extracellular fractions of the human lymphoblastoid cell line (LCL) culture media, cfTERRA is shown as a shorter form (&sim;200 nt) of cellular TERRA and co-purifies with CD63- and CD81-positive exosome vesicles that could be visualized by cryo-electron microscopy. Mass spectrometry and extracellular chromatin immunoprecipitation (ChIP) assays revealed that regular cfTERRA was physically interacting with histones and telomeric DNA. Incubation of cfTERRA-containing exosomes with peripheral blood mononuclear cells (PBMCs) stimulated transcription of several inflammatory cytokine genes, including TNF&alpha;, IL6, and C-X-C chemokine 10 (CXCL10). Exosomes engineered with elevated TERRA or liposomes with synthetic TERRA further stimulated inflammatory cytokines, suggesting that exosome-associated TERRA augments innate immune signaling. The levels of cfTERRA and DNA damage marker &gamma;H2AX were increasingly incorporated into the exosomes during telomere dysfunction. These dysfunctional telomere-derived exosomes activated a more robust transcription of inflammatory cytokines in PBMCs. These findings imply a previously unknown extrinsic function of TERRA and a potentially molecular mechanism of communication between telomeres and innate immune signaling in tissue and tumor microenvironments. </p><p>