Telomeres are essential chromosome end capping structures that safeguard the genome from dangerous DNA processing events. DNA strand invasion occurs during vital transactions at telomeres, including telomere length maintenance by the alternative lengthening of telomeres (ALT) pathway. During telomeric strand invasion, a single-stranded guanine-rich (G-rich) DNA invades at a complementary duplex telomere repeat sequence, forming a displacement loop (D-loop) in which the displaced DNA consists of the same G-rich sequence as the invading single-stranded DNA. Single-stranded G-rich telomeric DNA readily folds into stable, compact, structures called G-quadruplexes (GQs) in vitro and is anticipated to form within the context of a D-loop; however, evidence supporting this hypothesis is lacking. Here, we report a magnetic tweezers assay that permits the controlled formation of telomeric D-loops (TDLs) within uninterrupted duplex human telomere DNA molecules of physiologically relevant lengths. Our results are consistent with a model wherein the displaced single-stranded DNA of a TDL fold into a GQ. This study provides new insight into telomere structure and establishes a framework for the development of novel therapeutics designed to target GQs at telomeres in cancer cells.