Cellular immortality is believed to be a critical step in tumorigenesis. As an important component of the telomere maintenance mechanism, the activation of the enzyme telomerase is tightly associated with cellular immortality and cancer. Telomerase expression is detected in a majority of tumours, but is absent in most somatic tissues and correlates to clinical outcome in a number of cancer types. Telomerase expression is associated with the stage of differentiation but not necessarily with the rate of cell proliferation. Data also indicate that inhibition or absence of telomerase may result in cell crisis in cancer cells and tumour regression in cancer patients. These results suggest that cancer therapy based on telomerase inhibition could be a more effective and safer treatment for cancer, as well as provide a more accurate means for diagnosing and predicting clinical outcome in cancer. Complete understanding of the role of telomerase in tumorigenesis through well-designed clinical studies will have a significant clinical impact on the treatment and diagnosis of cancer.