Telomerase is a ribonucleoprotein reverse transcriptase that uses its RNA component as a template for synthesis of telomeric DNA repeats at the ends of linear eukaryotic chromosomes. Here, fluorescence in situ hybridization demonstrates that in HeLa cancer cells, human telomerase RNA (hTR) accumulates in the nucleoplasmic Cajal bodies (CBs). Localization of transiently expressed hTR to CBs is supported by a short sequence motif (411-UGAG-414) that is located in the 3'-terminal box H/ACA RNA-like domain of hTR and that is structurally and functionally indistinguishable from the CB-specific localization signal of box H/ACA small CB-specific RNAs. In synchronized HeLa cells, hTR shows the most efficient accumulation in CBs during S phase, when telomeres are most likely synthesized. CBs may function in post-transcriptional maturation (e.g., cap hypermethylation of hTR), but they may also play a role in the assembly and/or function of telomerase holoenzyme.