The environmental contaminant arsenic causes cancer, developmental retardation, and other degenerative diseases and, thus, is a serious health concern worldwide. Paradoxically, arsenic also may serve as an anti-tumor therapy, although the mechanisms of its antineoplastic effects remain unclear. Arsenic exerts its toxicity in part by generating reactive oxygen species. We show that arsenic-induced oxidative stress promotes telomere attrition, chromosome end-to-end fusions, and apoptotic cell death. An antioxidant, N-acetylcysteine, effectively prevents arsenic-induced oxidative stress, telomere erosion, chromosome instability, and apoptosis, suggesting that increasing the intracellular antioxidant level may have preventive or therapeutic effects in arsenic-induced chromosome instability and genotoxicity. Embryos with shortened telomeres from late generation telomerase-deficient mice exhibit increased sensitivity to arsenic-induced oxidative damage, suggesting that telomere attrition mediates arsenic-induced apoptosis. Unexpectedly, arsenite did not cause chromosome end-to-end fusions in telomerase RNA knockout mouse embryos despite progressively damaged telomeres and disrupting embryo viability. Together, these findings may explain why arsenic can initiate oxidative stress and telomere erosion, leading to apoptosis and anti-tumor therapy on the one hand and chromosome instability and carcinogenesis on the other.