Telomerase is often re-activated in human cancers and is widely used to immortalize cells in culture. In addition to the maintenance of telomeres, telomerase has been implicated in cell proliferation, genomic instability and apoptosis. Here we show that human telomerase reverse transcriptase (hTERT) is targeted to the mitochondria by an N-terminal leader sequence, and that mitochondrial extracts contain telomerase activity. In seven different human cell lines, mitochondrial telomerase increases hydrogen-peroxide-mediated mitochondrial DNA damage. hTERT expression did not alter the rate of hydrogen peroxide breakdown or endogenous cellular levels. Because the damaging effects of hydrogen peroxide are mediated by divalent metal ions (Fenton chemistry), we examined the levels of bioavailable metals. In all cases, higher levels of chelatable metals were found in hTERT-expressing cells. These results suggest that mitochondrial telomerase sensitizes cells to oxidative stress, which can lead to apoptotic cell death, and imply a novel function of telomerase in mitochondrial DNA transactions.