Translin and TRAX are a highly conserved pair of proteins that have a close functional relationship with one another. Originally, these nucleic acid binding proteins were implicated in chromosomal translocation in human leukaemia cells, but subsequently, they have been shown to function in a wide range of biological processes, including RNA interference passenger strand removal, tRNA precursor processing, and neuronal mRNA transport and, more recently, in the degradation of microRNA in oncogenesis. This led to the proposal that they could be druggable targets for a large number of cancers. Moreover, it has previously been proposed that they function at telomeres, although no direct evidence has been provided to support this. Previous analysis on Schizosaccharomyces pombe orthologues of Translin and TRAX, Tsn1 and Tfx1, have shown no notable functional role (Saccharomyces cerevisiae has no tsn1/tfx1 orthologue). Given the link to RNAi regulation in higher eukaryotic organisms, a series of double mutants of tsn1 and tfx1 and RNAi regulatory genes, ago1 and dcr1, were generated to investigate whether Tsn1 and Tfx1 have a redundant role with the RNAi regulators. Different approaches were used to demonstrate that loss of Tfx1, but not Tsn1, can partially suppress the chromosomal instability caused by loss of Ago1, without restoring centromere heterochromatin formation. We extend this to reveal that deletion of four sub-telomeric tlh genes also suppress the need for Ago1, as does the mutation of taz1—a factor that is required for telomere length control, although the mechanisms appear to be different. Extended analysis of Tfx1-and Tsn1-defective cells identify differential roles for these proteins in regulating the levels of distinct transcripts associated with the telomeres and sub-telomeres. These findings not only reveal two novel regulators of telomere dynamics, but also propose that modulating the transcriptional status at sub-telomeres partially suppresses the chromosome segregation defects conferred by loss of Ago1. This reveals a counterbalance between centromeres and telomeres in maintaining chromosome stability. Further analysis of Tsn1 and Tfx1 function led to the revelation of a novel and fundamentally important role for Tsn1 in the DNA damage recovery response in the absence of Dcr1, a function that may be linked to its original proposed role in generating chromosomal translocation. Our data not only separates the functions of Tsn1 and Tfx1 in S. pombe, but also reveals important functional roles for these paralogues in chromosome stability maintenance.