We have recently characterized two types of normal human breast epithelial cells (HBECs) from reduction mammoplasty. Type I cells express estrogen receptor, luminal epithelial cell markers, and stem cell characteristics (i.e., the ability to differentiate into other cell types and to form budding/ductal structures on Matrigel), whereas Type II cells show basal epithelial cell phenotypes. In this study, we have examined whether Type I HBECs are more susceptible to telomerase activation and immortalization after transfection with SV40 large T-antigen. The results show that both types of cells acquire extended life span [(EL); i.e., bypassing senescence] at a comparable frequency. However, they differ significantly in the ability to become immortal in continuous culture, ie., 11 of 11 Type I EL clones became immortal compared with 1 of 10 Type II EL clones. Both parental Type I and Type II cells as well as their transformed EL clones at early passages [approximately 30 cumulative population doubling level (cpdl)] showed a low level of telomerase activity as measured by the telomeric repeat amplification protocol assay. For all 11 of the Type I EL clones and the single Type II EL clone that became immortal, telomerase activities were invariably activated at middle passages (approximately 60 cpdl) or late passages (approximately 100 cpdl). For the four Type II EL clones randomly selected from the nine Type II clones that did not become immortal, the telomerase activities were found to be further diminished at mid-passage, before the end of the life span. Thus, normal HBECs do have a low level of telomerase activity, and Type I HBECs with stem cell characteristics are more susceptible to telomerase activation and immortalization, a basis on which they may be major target cells for breast carcinogenesis.