Defining the prognosis of individual cancer sufferers remains a significant clinical challenge. Here we assessed the ability of high‐resolution single telomere length analysis (STELA), combined with an experimentally derived definition of telomere dysfunction, to predict the clinical outcome of patients with chronic lymphocytic leukaemia (CLL). We defined the upper telomere length threshold at which telomere fusions occur and then used the mean of the telomere ‘fusogenic’ range as a prognostic tool. Patients with telomeres within the fusogenic range had a significantly shorter overall survival (P < 0·0001; Hazard ratio [HR] = 13·2, 95% confidence interval [CI] = 11·6–106·4) and this was preserved in early‐stage disease patients (P < 0·0001, HR=19·3, 95% CI = 17·8–802·5). Indeed, our assay allowed the accurate stratification of Binet stage A patients into those with indolent disease (91% survival at 10 years) and those with poor prognosis (13% survival at 10 years). Furthermore, patients with telomeres above the fusogenic mean showed superior prognosis regardless of their IGHV mutation status or cytogenetic risk group. In keeping with this finding, telomere dysfunction was the dominant variable in multivariate analysis. Taken together, this study provides compelling evidence for the use of high‐resolution telomere length analysis coupled with a definition of telomere dysfunction in the prognostic assessment of CLL.