We have previously shown that the protein subunit of telomerase, hTERT, has a bonafide N-terminal mitochondrial targeting sequence, and that ectopic hTERT expression in human cells correlated with increase in mtDNA damage after hydrogen peroxide treatment. In this study, we show, using a loxP hTERT construct, that this increase in mtDNA damage following hydrogen peroxide exposure is dependent on the presence of hTERT itself. Further experiments using a dominant negative hTERT mutant shows that telomerase must be catalytically active to mediate the increase in mtDNA damage. Etoposide, but not methylmethanesulfate, also promotes mtDNA lesions in cells expressing active hTERT, indicating genotoxic specificity in this response. Fibroblasts expressing hTERT not only show a approximately 2-fold increase in mtDNA damage after oxidative stress but also suffer a 10-30-fold increase in apoptotic cell death as assayed by Annexin-V staining, caspase-3 activation and PARP cleavage. Mutations to the N-terminal mitochondrial leader sequence causes a complete loss of mitochondrial targeting without affecting catalytic activity. Cells carrying this mutated hTERT not only have significantly reduced levels of mtDNA damage following hydrogen peroxide treatment, but strikingly also do not shown any loss of viability or cell growth. Thus, localization of hTERT to the mitochondria renders cells more susceptible to oxidative stress-induced mtDNA damage and subsequent cell death, whereas nuclear-targeted hTERT, in the absence of mitochondrial localization, is associated with diminished mtDNA damage, increased cell survival and protection against cellular senescence.