DNA sequence surveys in yeast and humans suggest that the forces shaping telomeric polymorphism and divergence are distinctly more dynamic than those in the euchromatic, gene-rich regions of the chromosomes. However, the generality of this pattern across outbreeding, multicellular eukaryotes has not been determined. To characterize the structure and evolution of Drosophila telomeres, we collected and analyzed molecular population genetics data from the X chromosome subtelomere in 58 lines of North American Drosophila melanogaster and 29 lines of African D. melanogaster. We found that Drosophila subtelomeres exhibit high levels of both structural and substitutional polymorphism relative to linked euchromatic regions. We also observed strikingly different patterns of variation in the North American and African samples. Moreover, our analyses of the polymorphism data identify a localized hotspot of recombination in the most-distal portion of the X subtelomere. While the levels of polymorphism decline sharply and in parallel with rates of crossing over per physical length over the distal first euchromatic megabase pairs of the X chromosome, our data suggest that they rise again sharply in the subtelomeric region (approximately 80 kbp). These patterns of historical recombination and geographic differentiation indicate that, similar to yeast and humans, Drosophila subtelomeric DNA is evolving very differently from euchromatic DNA.