The expression of telomerase, the enzyme that synthesizes telomeric DNA de novo, is suppressed in normal somatic human cells but is reactivated during tumorigenesis. This reactivation appears to arrest the normal loss of telomeric DNA incurred as human cells divide. Since continual loss of telomeric DNA is predicted to eventually limit cell proliferation, activation of telomerase in cancer cells may represent an important step in the acquisition of the cell immortalization which occurs during tumor progression. The telomerase holoenzyme is composed of both RNA and protein subunits. In humans, mRNA expression of hTERT (hEST2), the candidate telomerase catalytic subunit gene, appears to parallel the levels of telomerase enzyme activity, suggesting that induction of hTERT is necessary and perhaps sufficient for expression of telomerase activity in tumor cells. To test this model directly, we ectopically expressed an epitope-tagged version of hTERT in telomerase-negative cells and show that telomerase activity was induced to levels comparable to those seen in immortal telomerase-positive cells and that the expressed hTERT protein was physically associated with the cellular telomerase activity. We conclude that synthesis of the hTERT telomerase subunit represents the rate-limiting determinant of telomerase activity in these cells and that this protein, once expressed, becomes part of the functional telomerase holoenzyme.