Protection of telomeres 1 (POT1) proteins in various organisms bind telomeres and regulate their structure and function. In contrast to mice carrying two distinct POT1 genes encoding two POT1 proteins (POT1a and POT1b), humans have the single POT1 gene. In addition to full-length POT1 protein (variant v1), the human POT1 gene encodes four other variants due to alternative RNA splicing (variants v2, v3, v4, and v5), whose functions are poorly understood. The functional analyses of the NH2-terminally and COOH-terminally truncated POT1 variants in this study showed that neither the single-stranded telomere-binding ability of the NH2-terminal oligonucleotide-binding (OB) folds nor the telomerase-dependent telomere elongation activity mediated by the COOH-terminal TPP1-interacting domain was telomere protective by itself. Importantly, a COOH-terminally truncated variant (v5), which consists of the NH2-terminal OB folds and the central region of unknown function, was found to protect telomeres and prevent cellular senescence as efficiently as v1. Our data revealed mechanistic and functional differences between v1 and v5: (a) v1, but not v5, functions through the maintenance of telomeric 3′ overhangs; (b) p53 is indispensable to v5 knockdown-induced senescence; and (c) v5 functions at only a fraction of telomeres to prevent DNA damage signaling. Furthermore, v5 was preferentially expressed in mismatch repair (MMR)-deficient cells and tumor tissues, suggesting its role in chromosome stability associated with MMR deficiency. This study highlights a human-specific complexity in telomere protection and damage signaling conferred by functionally distinct isoforms from the single POT1 gene.