Human postnatal bone marrow stromal stem cells (BMSSCs) have a limited life-span and progressively lose their stem cell properties during ex vivo expansion. Here we report that ectopic expression of human telomerase reverse transcriptase (hTERT) in BMSSCs extended their life-span and maintained their osteogenic potential. In xenogenic transplants, hTERT-expressing BMSSCs (BMSSC-Ts) generated more bone tissue, with a mineralized lamellar bone structure and associated marrow, than did control BMSSCs. The enhanced bone-forming ability of BMSSC-Ts was correlated with a higher and sustained expression of the early pre-osteogenic stem cell marker STRO-1, indicating that telomerase expression helped to maintain the osteogenic stem cell pool during ex vivo expansion. These results show that telomerase expression can overcome critical technical barriers to the ex vivo expansion of BMSSCs, and suggest that telomerase therapy may be a useful strategy for bone regeneration and repair.