Telomerase is a specialized DNA polymerase that extends the 3' ends of eukaryotic linear chromosomes, a process required for genomic stability and cell viability. Here we present the crystal structure of the active Tribolium castaneum telomerase catalytic subunit, TERT, bound to an RNA-DNA hairpin designed to resemble the putative RNA-templating region and telomeric DNA. The RNA-DNA hybrid adopts a helical structure, docked in the interior cavity of the TERT ring. Contacts between the RNA template and motifs 2 and B' position the solvent-accessible RNA bases close to the enzyme active site for nucleotide binding and selectivity. Nucleic acid binding induces rigid TERT conformational changes to form a tight catalytic complex. Overall, TERT-RNA template and TERT-telomeric DNA associations are remarkably similar to those observed for retroviral reverse transcriptases, suggesting common mechanistic aspects of DNA replication between the two families of enzymes.