The RNA moiety of the ribonucleoprotein enzyme telomerase from the ciliate Euplotes crassus was identified and its gene was sequenced. Functional analysis, in which oligonucleotides complementary to portions of the telomerase RNA were tested for their ability to prime telomerase in vitro, showed that the sequence 5' CAAAACCCCAAA 3' in this RNA is the template for synthesis of telomeric TTTTGGGG repeats by the Euplotes telomerase. The data provide a direct demonstration of a template function for a telomerase RNA and demarcate the outer boundaries of the telomeric template. Telomerase can now be defined as a specialized reverse transcriptase.