Telomere-capping complexes (TCCs) protect the ends of linear chromosomes from illegitimate repair and end-to-end fusions and are required for genome stability. The identity and assembly of TCC components have been extensively studied, but whether TCCs require active maintenance in nondividing cells remains an open question. Here we show that Drosophila melanogaster requires Deadbeat (Ddbt), a sperm nuclear basic protein (SNBP) that is recruited to the telomere by the TCC and is required for TCC maintenance during genome-wide chromatin remodeling, which transforms spermatids to mature sperm. Ddbt-deficient males produce sperm lacking TCCs. Their offspring delay the initiation of anaphase as early as cycle 1 but progress through the first two cycles. Persistence of uncapped paternal chromosomes induces arrest at or around cycle 3. This early arrest can be rescued by selective elimination of paternal chromosomes and production of gynogenetic haploid or haploid mosaics. Progression past cycle 3 can also occur if embryos have reduced levels of the maternally provided checkpoint kinase Chk2. The findings provide insights into how telomere integrity affects the regulation of the earliest embryonic cell cycles. They also suggest that other SNBPs, including those in humans, may have analogous roles and manifest as paternal effects on embryo quality.