The shelterin protein complex is required for telomere protection in various eukaryotic organisms. In mammals, the shelterin subunit TRF2 is specialized in preventing ATM activation at telomeres and chromosome end fusion in somatic cells. Here, we demonstrate that the zebrafish ortholog of TRF2 (encoded by the terfa gene) is protecting against unwanted ATM activation genome-wide. The terfa-compromised fish develop a prominent and specific embryonic neurodevelopmental failure. The heterozygous fish survive to adulthood but exhibit a premature aging phenotype. The recovery from embryonic neurodevelopmental failure requires both ATM inhibition and transcriptional complementation of neural genes. Furthermore, restoring the expression of TRF2 in glial cells rescues the embryonic neurodevelopment phenotype. These results indicate that the shelterin subunit TRF2 evolved in zebrafish as a general factor of genome maintenance and transcriptional regulation that is required for proper neurodevelopment and normal aging. These findings uncover how TRF2 links development to aging by separate functions in gene expression regulation and genome stability control.