The ends of chromosomes, or telomeres, consist of short repeated sequences that are synthesized by a ribonucleoprotein-DNA polymerase called telomerase. The RNA component of telomerase is essential for enzyme activity. The maintenance of telomere length by telomerase has been proposed to be essential for cellular viability and to play an important role in cellular senescence and immortalization. We are interested in using the mouse as a model system for the study of telomerase. We studied telomerase activity and expression of the mouse telomerase RNA component (mTR) in two different transgenic mouse models of multistage tumorigenesis: models of islet cell carcinoma and squamous cell carcinoma. In both tumour models, telomerase activity was detected only in late-stage tumours, whereas the telomerase RNA was present at higher than normal levels in pre-neoplastic stages and increased further in late-stage tumours. However, the RNA levels did not parallel the amounts of telomerase activity detected, suggesting that regulation of telomerase activity does not correlate with the regulation of its RNA component. These results establish a direct correlation between progression to late-stage tumours and induction of telomerase activity, and suggest that the initial upregulation of telomerase RNA is an early event. To address the role of telomerase during normal mouse development and tumour formation, we have constructed a knockout mouse for the mouse telomerase RNA, mTR-/-. These mice and the cell lines derived from them are telomerase deficient.