Abstract Germline mutations in the chromatin remodelling protein ATRX cause a severe developmental disorder associated with α-thalassemia. In addition, ATRX is amongst the twenty genes most frequently mutated in cancer. How ATRX mutations alter gene expression remains unclear. Using the α-globin locus as a model, here we show that ATRX deficiency downregulates α-globin in a subset of cells exhibiting DNA damage. A G-rich repeat at the α-globin locus serves as a potential site of G-quadruplex formation and DNA damage. ATRX binds this repeat co-transcriptionally, and its loss increases R-loop accumulation at this site, leading to local DNA damage and transcriptional disruption in cis . Deletion of this repeat abolishes this effect, while targeted DNA damage reinstates it. These findings reveal a mechanism linking ATRX’s role in genome stability to transcriptional regulation and uncover a molecular basis of human genetic disease mediated via a distal G-rich repeat.