Loss of telomeric repeats during cell proliferation could play a role in senescence. It has been generally assumed that activation of telomerase prevents further telomere shortening and is essential for cell immortalization. In this study, we performed a detailed cytogenetic and molecular characterization of four SV40 transformed human fibroblastic cell lines by regularly monitoring the size distribution of terminal restriction fragments, telomerase activity and the associated chromosomal instability throughout immortalization. The mean TRF lengths progressively decreased in pre-crisis cells during the lifespan of the cultures. At crisis, telomeres reached a critical size, different among the cell lines, contributing to the peak of dicentric chromosomes, which resulted mostly from telomeric associations. We observed a direct correlation between short telomere length at crisis and chromosomal instability. In two immortal cell lines, although telomerase was detected, mean telomere length still continued to decrease whereas the number of dicentric chromosomes associated was stabilized. Thus telomerase could protect specifically telomeres which have reached a critical size against end-to-end dicentrics, while long telomeres continue to decrease, although at a slower rate as before crisis. This suggests a balance between elongation by telomerase and telomere shortening, towards a stabilized 'optimal' length.