Embryonic stem cells (ESC) are a unique cell population with the ability to self-renew and differentiate into all three germ layers. Human ESC express the telomerase reverse transcriptase (TERT) gene and the telomerase RNA (TR) and show telomerase activity, but TERT, TR, and telomerase are all downregulated during the differentiation process. To examine the role of telomerase in human ESC self-renewal and differentiation, we modulated the expression of TERT. Upregulation of TERT and increased telomerase activity enhanced the proliferation and colony-forming ability of human ESC, as well as increasing the S phase of the cell cycle at the expense of a reduced G1 phase. Upregulation of TERT expression was associated with increases in CYCLIN D1 and CDC6 expression, as well as hyperphosphorylation of RB. The differentiated progeny of control ESC showed shortening of telomeric DNA as a result of loss of telomerase activity. In contrast, the differentiated cells from TERT-overexpressing ESC maintained high telomerase activity and accumulated lower concentrations of peroxides than wild-type cells, implying greater resistance to oxidative stress. Although the TERT-overexpressing human ESC are able to form teratoma composed of three germ layers in vivo, their in vitro differentiation to all primitive and embryonic lineages was suppressed. In contrast, downregulation of TERT resulted in reduced ESC proliferation, increased G1, and reduced S phase. Most importantly, downregulation of TERT caused loss of pluripotency and human ESC differentiation to extraembryonic and embryonic lineages. Our results indicate for the first time an important role for TERT in the maintenance of human ESC pluripotency, cell cycle regulation, and in vitro differentiation capacity.