Eukaryotic cells invest a large proportion of their genome in maintaining telomere length homeostasis. Among the 173 non-essential yeast genes found to affect telomere length, a large proportion is involved in vacuolar traffic. When mutated, these vacuolar protein-sorting (VPS) genes lead to telomeres shorter than those observed in the wild type. Using genetic analysis, we characterized the pathway by which VPS15, VPS34, VPS22, VPS23 and VPS28 affect the telomeres. Our results indicate that these VPS genes affect telomere length through a single pathway and that this effect requires the activity of telomerase and the Ku heterodimer, but not the activity of Tel1p or Rif2p. We present models to explain the link between vacuolar traffic and telomere length homeostasis.