Telomerase is a specialized type of reverse transcriptase which catalyzes the synthesis and extension of telomeric DNA (for review, see ref.1). This enzyme is highly active in most cancer cells, but is inactive in most somatic cells. This striking observation led to the suggestion that telomerase might be important for the continued growth or progression of cancer cells. However, little is known about the molecular mechanism of telomerase activation in cancer cells. Human telomerase reverse transcriptase (hTRT) has recently been identified as a putative human telomerase catalytic subunit. We transfected the gene encoding hTRT into telomerase-negative human normal fibroblast cells and demonstrated that expression of wild-type hTRT induces telomerase activity, whereas hTRT mutants containing mutations in regions conserved among other reverse transcriptases did not. Hepatocellular carcinoma (20 samples) and non-cancerous liver tissues (19 samples) were examined for telomerase activity and expression of hTRT, the human telomerase RNA component (hTR; encoded by TERC) and the human telomerase-associated protein (hTLP1; encoded by TEP1). A significant correlation between hTRT expression and telomerase activity was observed. These results indicate that the hTRT protein is the catalytic subunit of human telomerase, and that it plays a key role in the activation of telomerase in cancer cells.