The perinuclear localization of Saccharomyces cerevisiae telomeres provides a useful model for studying mechanisms that control chromosome positioning. Telomeres tend to be localized at the nuclear periphery during early interphase, but following S phase they delocalize and remain randomly positioned within the nucleus. We investigated whether DNA replication causes telomere delocalization from the nuclear periphery. Using live-cell fluorescence microscopy, we show that delaying DNA replication causes a corresponding delay in the dislodgment of telomeres from the nuclear envelope, demonstrating that replication of individual telomeres causes their delocalization. Telomere delocalization is not simply the result of recruitment to a replication factory in the nuclear interior, since we found that telomeric DNA replication can occur either at the nuclear periphery or in the nuclear interior. The telomere-binding complex Ku is one of the factors that localizes telomeres to the nuclear envelope. Using a gene locus tethering assay, we show that Ku-mediated peripheral positioning is switched off after DNA replication. Based on these findings, we propose that DNA replication causes telomere delocalization by triggering stable repression of the Ku-mediated anchoring pathway. In addition to maintaining genetic information, DNA replication may therefore regulate subnuclear organization of chromatin.