The existence of redundant replication and repair systems that ensure genome stability underscores the importance of faithful DNA replication. Nowhere is this complexity more evident than in challenging DNA templates, including highly repetitive or transcribed sequences. Here, we demonstrate that flap endonuclease 1(FEN1), a canonical lagging strand DNA replication protein, is required for normal, complete leading strand replication at telomeres. We find that the loss of FEN1 nuclease activity, but not DNA repair activities, results in leading strand-specific telomere fragility. Furthermore, we show that FEN1 depletion-induced telomere fragility is increased by RNA polymerase II inhibition and is rescued by ectopic RNase H1 expression. These data suggest that FEN1 limits leading strand-specific telomere fragility by processing RNA:DNA hybrid/flap intermediates that arise from co-directional collisions occurring between the replisome and RNA polymerase. Our data reveal the first molecular mechanism for leading strand-specific telomere fragility and the first known role for FEN1 in leading strand DNA replication. Because FEN1 mutations have been identified in human cancers, our findings raise the possibility that unresolved RNA:DNA hybrid structures contribute to the genomic instability associated with cancer.