About one third of patients with acquired aplastic anemia (AA) have very short telomeres of their peripheral blood leukocytes; short telomeres correlate to long disease duration and poor response to immunosuppressive therapy. We have recently shown that some cases of apparently “acquired” AA have mutations in TERC, the gene encoding the RNA component of telomerase (Fogarty et al., Lancet 2003; 632:1628; Yamaguchi et al., Blood 2003; 102:916). In the current study, we examined TERT, the gene encoding the telomerase reverse transcriptase, by sequencing the gene's exons and proximal promoter region in peripheral blood DNA samples from 122 patients with AA and 282 controls. Four novel nonsynonymous mutations among five patients, not present in controls, were discovered; three polymorphisms were identified, two nonsynonymous SNPs and one deletion of a single amino acid. To investigate the functional consequences of the mutations, telomere lengths of leukocytes were assessed by flow cytometric fluorescence in situ hybridization (flow-FISH). All patients carrying TERT mutations had markedly short telomeres compared to age-matched controls, as opposed to other AA patients with polymorphisms, whose telomeres were normal. In one patient's kindred, presence of the TERT mutation in other family members correlated to telomere shortening; non-carriers had normal telomeres. Telomerase function in patients' T cells, activated by phytohemagglutinin and interleukin-2 to increase enzymatic activity, was measured by the telomeric repeat amplification protocol (TRAP). In all mutant AA patients evaluated, cell lysates yielded very low or no telomerase activity, as compared to normal controls. We cloned the AA-related mutations into a TERT expression vector and co-transfected these vectors into VA13 cells (with a TERC-containing vector, as this cell line does not have telomerase activity due to absent TERC and TERT expression). All mutant TERT-containing cell lysates were severely deficient in enzymatic activity. TERT gene expression, as evaluated by Northern blot, was normal in cells transfected with the mutated genes. When vectors containing wild-type TERT and individual TERT mutations were cotransfected, telomerase activity was dramatically reduced, in comparison to transfection of wild-type TERT vector only. These results indicate a dominant negative mechanism of action of TERT mutations as responsible for the absence of telomerase activity in AA patients' cells. Family members lacking telomerase activity have short telomeres but appear physically normal and have no hematological abnormalities. In a provisional model of the telomere repair complex and marrow failure, mutations in DKC1 and the stability regions of TERC cause dyskeratosis congenita, with early presentation and associated physical anomalies. Mutations that affect the enzyme-binding region of TERC and in TERT, the reverse transcriptase itself, lead to a constitutionally reduced stem cell compartment and appear to be genetic risk factors for the development of “acquired” aplastic anemia.