The alternative lengthening of telomeres (ALT) mechanism allows cancer cells to escape senescence and apoptosis in the absence of active telomerase. A characteristic feature of this pathway is the assembly of ALT-associated promyelocytic leukemia (PML) nuclear bodies (APBs) at telomeres. Here, we dissected the role of APBs in a human ALT cell line by performing an RNA interference screen using an automated 3D fluorescence microscopy platform and advanced 3D image analysis. We identified 29 proteins that affected APB formation, which included proteins involved in telomere and chromatin organization, protein sumoylation and DNA repair. By integrating and extending these findings, we found that APB formation induced clustering of telomere repeats, telomere compaction and concomitant depletion of the shelterin protein TRF2 (also known as TERF2). These APB-dependent changes correlated with the induction of a DNA damage response at telomeres in APBs as evident by a strong enrichment of the phosphorylated form of the ataxia telangiectasia mutated (ATM) kinase. Accordingly, we propose that APBs promote telomere maintenance by inducing a DNA damage response in ALT-positive tumor cells through changing the telomeric chromatin state to trigger ATM phosphorylation.