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PARN encodes poly(A)‐specific ribonuclease. Biallelic and monoallelic PARN variants are associated with Hoyeraal‐Hreidarsson syndrome/dyskeratosis congenita and idiopathic pulmonary fibrosis (IPF), respectively. The molecular features associated with incomplete penetrance of PARN‐associated IPF have not been described. We report a family with a rare missense, p.Y91C, and a novel insertion, p.(I274*), PARN variant. We found PARN p.Y91C had reduced deadenylase activity and the p.(I274*) transcript was depleted. Detailed analysis of the consequences of these variants revealed that, while PARN protein was lowest in the severely affected biallelic child who had the shortest telomeres, it was also reduced in his mother with the p.(I274*) variant but telomeres at the 50th percentile. Increased adenylation of telomerase RNA, human telomerase RNA, and certain small nucleolar RNAs, and impaired ribosomal RNA maturation were observed in cells derived from the severely affected biallelic carrier, but not in the other, less affected biallelic carrier, who had less severely shortened telomeres, nor in the monoallelic carriers who were unaffected and had telomeres ranging from the 1st to the 50th percentiles. We identified hsa‐miR‐202‐5p as a potential negative regulator of PARN. We propose one or more genetic modifiers influence the impact of PARN variants on its targets and this underlies incomplete penetrance of PARN‐associated disease.