The telomerase ribonucleoprotein complex caps chromosome ends by adding telomeric repeats. Here we show that catalytically active human telomerase has a regulated intranuclear localization that is dependent on the cell-cycle stage, transformation and DNA damage. In primary cell lines, low expression of a fusion protein of green fluorescent protein and telomerase reverse transcriptase (GFP-hTERT) increases telomerase activity and stabilizes the maintenance of telomere length. Confocal microscopy shows that the release of telomerase to the nucleoplasm from sequestration at nucleolar sites is enhanced at the expected time of telomere replication. By contrast, in tumour and transformed cells, there is an almost complete dissociation of telomerase from nucleoli at all stages of the cell cycle. Transfection of the simian virus 40 genome into a primary cell line is sufficient to mobilize telomerase from nucleoli to the nucleoplasm. Conversely, ionizing radiation induces the reassociation of telomerase with nucleoli in both primary and transformed cells. These findings show that transformation and DNA damage have opposite effects on the cellular regulation of active telomerase, affecting the enzyme's access to both telomeric and nontelomeric substrates.