A growing body of literature suggests that the homologous recombination/repair (HR) pathway cooperates with components of the shelterin complex to promote both telomere maintenance and non-telomeric HR. This may be due to the ability of both HR and shelterin proteins to promote strand invasion, wherein a single-stranded DNA (ssDNA) substrate base pairs with a homologous double-stranded DNA (dsDNA) template displacing a loop of ssDNA (D-loop). Rad51 recombinase catalyzes D-loop formation during HR, and telomere repeat-binding factor 2 (TRF2) catalyzes the formation of a telomeric D-loop that stabilizes a looped structure in telomeric DNA (t-loop) that may facilitate telomere protection. We have characterized this functional interaction in vitro using a fluorescent D-loop assay measuring the incorporation of Cy3-labeled 90 nucleotide telomeric and non-telomeric substrates into telomeric and non-telomeric plasmid templates. We report that pre-incubation of a telomeric template with TRF2 inhibits the ability of Rad51 to promote telomeric D-loop formation when pre-incubated with a telomeric substrate. This suggests Rad51 does not facilitate t-loop formation, and suggests a mechanism whereby TRF2 can inhibit HR at telomeres. We also report a TRF2 mutant lacking the dsDNA binding domain promotes Rad51-mediated non-telomeric D-loop formation, possibly explaining how TRF2 promotes non-telomeric HR. Finally, we report telomere repeat binding factor 1 (TRF1) promotes Rad51-mediated telomeric D-loop formation, which may facilitate HR-mediated replication fork restart and explain why TRF1 is required for efficient telomere replication.