Telomerase activity is restricted in humans. Consequentially, telomeres shorten in most cells throughout our lives. Telomere dysfunction in vertebrates has been primarily studied in inbred mice strains with very long telomeres that fail to deplete telomeric repeats during their lifetime. It is, therefore, unclear how telomere shortening regulates tissue homeostasis in vertebrates with naturally short telomeres. Zebrafish have restricted telomerase expression and human-like telomere length. Here we show that first-generation tert-/- zebrafish die prematurely with shorter telomeres. tert-/- fish develop degenerative phenotypes, including premature infertility, gastrointestinal atrophy, and sarcopaenia. tert-/- mutants have impaired cell proliferation, accumulation of DNA damage markers, and a p53 response leading to early apoptosis, followed by accumulation of senescent cells. Apoptosis is primarily observed in the proliferative niche and germ cells. Cell proliferation, but not apoptosis, is rescued in tp53-/-tert-/- mutants, underscoring p53 as mediator of telomerase deficiency and consequent telomere instability. Thus, telomerase is limiting for zebrafish lifespan, enabling the study of telomere shortening in naturally ageing individuals.