Telomeres play an important role in the proliferation and senescence of normal and malignant cells. To test the role of telomerase in acute myeloid leukemia (AML), we expressed the telomerase reverse transcriptase (hTERT) gene, a dominant-negative hTERT (DN-hTERT) (D868A, D869A) gene, or a gene encoding green fluorescence protein (GFP) in the leukemia cell line K562 and in primary AML cells from different patients, using retroviral vectors. Cells transduced with hTERT exhibited elevated levels of telomerase activity compared to GFP controls, whereas cells expressing DN-hTERT had decreased telomerase activity. K562 populations transduced with DN-hTERT showed reduced clonogenicity, telomere dysfunction and increased numbers of apoptotic cells compared to GFP- or hTERT-transduced cells. Two of four clones transduced with DN-hTERT died after 30 and 53 population doublings, respectively. Transduced AML cells were tested in primary colony-forming unit (CFU) and suspension culture assays. Relative to hTERT- and GFP-transduced controls, AML cells transfected with DN-hTERT produced fewer CFU and showed lower engraftment after transplantation into sublethally irradiated beta(2)-m(-/-) nonobese diabetic/severe combined immunodeficient mice. We conclude that telomerase is limiting the growth of the leukemic cell line K562 and primary AML progenitor cells. Our data warrant further studies of the therapeutic use of telomerase inhibitors in AML.