Dyskeratosis congenita (DC) is a genetic disorder of defective tissue maintenance and cancer predisposition caused by short telomeres and impaired stem cell function. Telomerase mutations are thought to precipitate DC by reducing either the catalytic activity or the overall levels of the telomerase complex. However, the underlying genetic mutations and the mechanisms of telomere shortening remain unknown for as many as 50% of DC patients, who lack mutations in genes controlling telomere homeostasis. Here, we show that disruption of telomerase trafficking accounts for unknown cases of DC. We identify DC patients with missense mutations in TCAB1, a telomerase holoenzyme protein that facilitates trafficking of telomerase to Cajal bodies. Compound heterozygous mutations in TCAB1 disrupt telomerase localization to Cajal bodies, resulting in misdirection of telomerase RNA to nucleoli, which prevents telomerase from elongating telomeres. Our findings establish telomerase mislocalization as a novel cause of DC, and suggest that telomerase trafficking defects may contribute more broadly to the pathogenesis of telomere-related disease.