Telomerase is a DNA polymerase fundamental to the replication and maintenance of telomere sequences at chromosome ends. The RNA component of telomerase is essential for the synthesis of telomere repeats. In vitro, the template domain (5'-CAACCCCAA-3') of the Tetrahymena telomerase RNA dictates the addition of Tetrahymena-specific telomere repeats d(TTGGGG)n, onto the 3' end of G-rich or telomeric substrates that are base-paired with the template and alignment regions of the RNA. Using a reconstituted in vitro system, we determined that altering the sequence of the alignment and template domains affects processivity of telomerase without abolishing telomerase activity. These results suggest that alternative template/alignment regions may be functional. In the ciliate telomerase RNAs, there is a conserved sequence 5'-(CU)GUCA-3', located two residues upstream of the template domain. The location and sequence of this conserved domain defined the 5' boundary of the template region. These data provide insights into the regulation of telomere synthesis by telomerase.