Human fibroblasts whose lifespan in culture has been extended by expression of a viral oncogene eventually undergo a growth crisis marked by failure to proliferate. It has been proposed that telomere shortening in these cells is the property that limits their proliferation. Here we report that ectopic expression of the wild-type reverse transcriptase protein (hTERT) of human telomerase averts crisis, at the same time reducing the frequency of dicentric and abnormal chromosomes. Surprisingly, as the resulting immortalized cells containing active telomerase continue to proliferate, their telomeres continue to shorten to mean lengths below those in control cells that enter crisis. These results provide evidence for a protective function of human telomerase that allows cell proliferation without requiring net lengthening of telomeres.