Werner syndrome (WS) is an accelerated ageing disorder with genomic instability caused by WRN protein deficiency. Many features seen in WS can be explained by the diverse functions of WRN in DNA metabolism. However, the origin of the large genomic deletions and telomere fusions are not yet understood. Here, we report that WRN regulates the pathway choice between classical (c)- and alternative (alt)-nonhomologous end joining (NHEJ) during DNA double-strand break (DSB) repair. It promotes c-NHEJ via helicase and exonuclease activities and inhibits alt-NHEJ using non-enzymatic functions. When WRN is recruited to the DSBs it suppresses the recruitment of MRE11 and CtIP, and protects the DSBs from 5' end resection. Moreover, knockdown of Wrn, alone or in combination with Trf2 in mouse embryonic fibroblasts results in increased telomere fusions, which were ablated by Ctip knockdown. We show that WRN regulates alt-NHEJ and shields DSBs from MRE11/CtIP-mediated resection to prevent large deletions and telomere fusions.