Alternative lengthening of telomeres (ALT) is a telomerase independent telomere maintenance mechanism that occurs in ∼15% of cancers. The potential mechanism of ALT is homology-directed telomere synthesis, but molecular mechanisms of how ALT maintains telomere length in human cancer is poorly understood. Here, we generated TERC (telomerase RNA) gene knockouts in telomerase positive cell lines that resulted in long-term surviving clones acquiring the ALT pathway but at a very low frequency. By comparing these ALT cells with parental telomerase positive cells, we observed that ALT cells possess excessively long telomeric overhangs derived from telomere elongation processes that mostly occur during S phase. ALT cells exhibited preferential elongation of the telomeric lagging strands, whereas telomerase positive cells exhibited similar elongation between leading and lagging strands. We propose that the ALT pathway preferentially occurs at telomeric lagging strands leading to heterogeneous telomere lengths observed in most ALT cancers.