Estrogen is implicated as playing an important role in aging and tumorigenesis of estrogen responsive tissues; however the mechanisms underlying the mitogenic actions of estrogen are not fully understood. Here we report that estrogen deficiency in mice caused by targeted disruption of the aromatase gene results in a significant inhibition of telomerase maintenance of telomeres in mouse ovaries in a tissue-specific manner. The inhibition entails a significant shortening of telomeres and compromised proliferation in the follicular granulosa cell compartment of ovary. Gene expression analysis showed decreased levels of proto-oncogene c-Myc and the telomerase catalytic subunit, telomerase reverse transcriptase (TERT), in response to estrogen deficiency. Estrogen replacement therapy led to increases in TERT gene expression, telomerase activity, telomere length and ovarian tissue growth, thereby reinstating ovary development to normal in four weeks. Our data demonstrate for the first time that telomere maintenance is the primary mechanism mediating the mitogenic effect of estrogen on ovarian granulosa cell proliferation by upregulating the genes of c-Myc and TERT in vivo. Estrogen deficiency or over-activity may cause ovarian tissue aging or tumorigenesis, respectively, through estrogen regulation of telomere remodeling.