Activation of telomerase in human cancers is thought to be necessary to overcome the progressive loss of telomeric DNA that accompanies proliferation of normal somatic cells. According to this model, telomerase provides a growth advantage to cells in which extensive terminal sequence loss threatens viability. To test these ideas, we have examined telomere dynamics and telomerase activation during mammary tumorigenesis in mice carrying a mouse mammary tumor virus long terminal repeat-driven Wnt-1 transgene. We also analyzed Wnt-1-induced mammary tumors in mice lacking p53 function. Normal mammary glands, hyperplastic mammary glands, and mammary carcinomas all had the long telomeres (20 to 50 kb) typical of Mus musculus and did not show telomere shortening during tumor development. Nevertheless, telomerase activity and the RNA component of the enzyme were consistently upregulated in Wnt-1-induced mammary tumors compared with normal and hyperplastic tissues. The upregulation of telomerase activity and RNA also occurred during tumorigenesis in p53-deficient mice. The expression of telomerase RNA correlated strongly with histone H4 mRNA in all normal tissues and tumors, indicating that the RNA component of telomerase is regulated with cell proliferation. Telomerase activity in the tumors was elevated to a greater extent than telomerase RNA, implying that the enzymatic activity of telomerase is regulated at additional levels. Our data suggest that the mechanism of telomerase activation in mouse mammary tumors is not linked to global loss of telomere function but involves multiple regulatory events including upregulation of telomerase RNA in proliferating cells.