Telomerase is a ribonucleoprotein complex responsible for maintaining telomere length of eukaryotic chromosomes. Human telomerase has two main components, the human telomerase reverse transcriptase and the human telomerase RNA (hTR). Two domains of hTR essential for telomerase activity are the template domain, comprised of an 11-nt templating and alignment sequence, and the CR4/CR5 domain. Highly conserved residues in the CR4/CR5 domain form the stem-loop P6.1, which is important for assembly and activity of mammalian telomerase. Here, we have determined that stem-loop P6.1 can participate in a long-range RNA-RNA interaction with the template region of hTR. We characterized this interaction through mobility shift assays, mutation analysis, and UV cross-linking experiments. Mutation analysis revealed that the P6.1 loop nucleotides participate in the interaction with the template. The site of interaction at the template domain was determined via UV cross-linking experiments. These data show that an RNA-RNA interaction exists between two highly conserved regions of hTR that are critical for the higher order folding of telomerase RNA. This interaction argues for the proximity of the template and the CR4/CR5 domain, and provides the basis for a revised model of hTR, partitioning the RNA into a catalytic domain and a localization domain.