Alternative lengthening of telomeres (ALT) is mediated by break-induced replication (BIR), but how BIR is regulated at telomeres is poorly understood. Here, we show that telomeric BIR is a self-perpetuating process. By tethering PML-IV to telomeres, we induced telomere clustering in ALT-associated PML bodies (APBs) and a POLD3-dependent ATR response at telomeres, showing that BIR generates replication stress. Ablation of BLM helicase activity in APBs abolishes telomere synthesis but causes multiple chromosome bridges between telomeres, revealing a function of BLM in processing inter-telomere BIR intermediates. Interestingly, the accumulation of BLM in APBs requires its own helicase activity and POLD3, suggesting that BIR triggers a feedforward loop to further recruit BLM. Enhancing BIR induces PIAS4-mediated TRF2 SUMOylation, and PIAS4 loss deprives APBs of repair proteins and compromises ALT telomere synthesis. Thus, a BLM-driven and PIAS4-mediated feedforward loop operates in APBs to perpetuate BIR, providing a critical mechanism to extend ALT telomeres.