Telomerase synthesizes telomeric DNA by copying a short template sequence within its telomerase RNA component. We delineated nucleotides and base-pairings within a previously mapped central domain of the Saccharomyces cerevisiae telomerase RNA (TLC1) that are important for telomerase function and for binding to the telomerase catalytic protein Est2p. Phylogenetic comparison of telomerase RNA sequences from several budding yeasts revealed a core structure common to Saccharomyces and Kluyveromyces yeast species. We show that in this structure three conserved sequences interact to provide a binding site for Est2p positioned near the template. These results, combined with previous studies on telomerase RNAs from other budding yeasts, vertebrates, and ciliates, define a minimal universal core for telomerase RNAs.