It is impossible to play in tune if the intonation is not properly set on your Telecaster. The guitar may sound in tune when you play on the first half of the guitar neck, but as you go higher up the neck the notes will be sharp or flat. Bad intonation is especially noticeable when you play chords, because the individual strings are not in tune with each other. Setting the intonation on a Telecaster requires patience and developing a feel for it. If you are a beginner it is good to have an experienced friend help you the first few times when you attempt to adjust the intonation.
Measure the length of the fretboard with a measuring tape to determine the scale length of the Telecaster. Measure from the inside of the nut to the 12th fret. Double this measurement to determine the scale length.
Adjust each of the six parts of the bridge saddle to the scale length. Begin with the first string. Measure the distance from the nut to the center of the bridge saddle. Use an Allen wrench to move the first string saddle bridge to coincide with the scale length. Use the string gauge of the adjacent strings to set the bridge saddles for the other strings. Work from the second string to the sixth string. If the gauge of the second string is .011 inches, move the saddle bridge back .011 inches. Follow the same procedure for the remaining strings.
Capo the first fret and depress the sixth string at the highest fret on the fretboard. Check the gap between the bottom of the depressed string and the eighth fret. The general rule is that the gap should be between .003 inches and .066 inches. However, this may vary with the style and gauge of strings that are used on the guitar. Go to Fender.com to find a gauge diagram. Use the truss rod to make adjustments.
Adjust the truss rod with a truss rod tool. Purchase the truss rod tool at a guitar store. The truss rod is accessible in the headstock of the Telecaster above the nut. Adjust the truss rod with quarter turns. Turn the truss rod clockwise to decrease the gap and counterclockwise to increase it. Depress the sixth string at the last fret and examine the gap between it and the eighth fret each time you make a quarter turn.
Tune the Telecaster to standard tuning using an electric tuner. Check the intonation of the guitar with the electric tuner. Play each string open and at the 12th fret. If the string is in tune in the open position but sharp or flat at the 12th fret, the length of the string needs to be adjusted. Each saddle bridge has a screw in the back of the bridge plate that allows you to move the saddle bridge forward or backward. If the string is sharp, increase the length of the string by shortening the saddle bridge. Lengthen the saddle bridge if the string is flat.