Germ-line mutations of the retinoblastoma gene (RB1) predispose to both sporadic and radiation-induced osteosarcoma, tumors characterized by high levels of genomic instability and activation of ALT (alternative lengthening of telomeres). Mice with haploinsufficiency of the Rb1 gene in the osteoblastic lineage reiterate the radiation-susceptibility to osteosarcoma seen in patients with germ-line RB1 mutations. We demonstrate that the susceptibility is accompanied by an increase in genomic instability resulting from Rb1-dependent telomere erosion. Radiation exposure did not accelerate the rate of telomere loss but amplified the genomic instability resulting from the dysfunctional telomeres. We propose that telomere maintenance is a non-canonical caretaker function of Rb1, and that a deficiency of Rb1 increases susceptibility to radiation-induced carcinogenesis by promoting chromosomal aberrations.