Genetic studies using knockout mouse models provide strong evidence for the essential role of the ubiquitin-like protein UFM1 for hematopoiesis, especially erythroid development, yet its biological roles in this process are largely unknown. Here we have identified a UFL1-dependent UFMylation of the MRE11 nuclease on the K281 and K282 residues. We show that Hela cells lacking the specific UFM1 E3 ligase display severe telomere shortening. We further demonstrate either by deleting UFM1 or by mutating MRE11 UFMylation sites that preventing MRE11 UFMylation impacts its interaction with the telomere protein TRF2. However, the MRE11 function in double-strand-break repair remains intact. We validate these results in vivo by showing that Zebrafish knockouts for the genes ufl1 and ufm1 have shorter telomeres in hematopoietic cells. Here we present UFMylation has a new mechanisms of regulation for telomere length maintenance with a role in hematopoiesis.