Telomeres are composed of long arrays of TTAGGG repeats and associated proteins that act as a protective cap for chromosome ends. The length of telomere repeats is set in the germline but decreases in somatic cells, primarily as a function of DNA replication. Progressive telomere shortening limits stem cell divisions and probably acts as a tumor suppressor mechanism. Using a sensitive PCR method to detect the length of individual telomere repeats on specific chromosomes, we confirmed that telomere length decreases from primitive to more differentiated human cell types within the hematopoietic hierarchy. Genetic mutations in the components of telomerase (the RNA template sequence hTERC, reverse transcriptase hTERT, and Syskerin DKC1) have recently been implicated in a variety of bone marrow failure syndromes, idiopathic pulmonary fibrosis, and more recently, acute myeloid leukemia (AML). The majority of mutations discovered in AML patients were heritable and resulted in partial loss of telomerase activity, a finding counterintuitive to the requirement of telomerase in cancer cells. We have found heritable hypomorphic TERT mutations in other cancers as well, and we propose that such mutations result in short telomeres and premature loss of stem cells. Loss of normal stem cells could provide strong selection for abnormal cells incapable of responding to DNA damage signals originating from short telomeres. Such cells will have a DNA repair defect resulting in genomic instability and a mutator phenotype. Our findings point to an intimate connection between senescence and cancer and highlight the important role of telomeres in the biology of normal and malignant human cells.