Telomerase is active in about 90% of cancers and contributes to the immortality of cancer cells by maintaining the lengths of the ends of chromosomes. Undifferentiated embryonic human teratocarcinoma (HT) cells were found to express high levels of hTERT, the catalytic subunit of telomerase, and the hTERT promoter was unmethylated in these cells. Retinoic acid (RA)-induced differentiation led to hTERT gene silencing and increased methylation of the hTERT promoter. Treatment with trichostatin A, a histone deacetylase inhibitor, resulted in hTERT reactivation only in very early differentiating HT cells. After methylation patterns had been established within the hTERT promoter region in late differentiating cells, 5-azacytidine, a common demethylating agent, activated the hTERT gene but trichostatin A had no effect on hTERT transcription. These studies suggest that histone deacetylation is involved in early hTERT gene down-regulation and that DNA methylation may maintain silencing of the hTERT gene in these cells.