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L1 elements can cause DNA damage and genomic variation via retrotransposition and the generation of endonuclease-dependent DNA breaks. These processes require L1 ORF2p protein that contains an endonuclease domain, which cuts genomic DNA, and a reverse transcriptase domain, which synthesizes cDNA. The complete impact of L1 enzymatic activities on genome stability and cellular function remains understudied, and the spectrum of L1-induced mutations, other than L1 insertions, is mostly unknown. Using an inducible system, we demonstrate that an ORF2p containing functional reverse transcriptase is sufficient to elicit DNA damage response even in the absence of the functional endonuclease. Using a TK/Neo reporter system that captures misrepaired DNA breaks, we demonstrate that L1 expression results in large genomic deletions that lack any signatures of L1 involvement. Using an in vitro cleavage assay, we demonstrate that L1 endonuclease efficiently cuts telomeric repeat sequences. These findings support that L1 could be an unrecognized source of disease-promoting genomic deletions, telomere dysfunction, and an underappreciated source of chronic RT-mediated DNA damage response in mammalian cells. Our findings expand the spectrum of biological processes that can be triggered by functional and nonfunctional L1s, which have impactful evolutionary- and health-relevant consequences.