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A rsenic is effective in the treatment of acute promyelocytic leukemia. Paradoxically, it is also carcinogenic. In the process of elucidating a mechanism of arsenic resistance in a leukemia cell line, NB4, we discovered that arsenic exposure causes chromosomal abnormalities, with a preponderance of end-to-end fusions. These chromosomal end fusions suggested that telomerase activity may be inhibited by arsenic. We found that arsenic inhibits transcription of the hTERT gene, which encodes the reverse transcriptase subunit of human telomerase. This effect may in part be explained by decreased c-Myc and Sp1 transcription factor activities. Decreased telomerase activity leads to chromosomal end lesions, which promote either genomic instability and carcinogenesis or cancer cell death. These phenomena may explain the seemingly paradoxical carcinogenic and antitumor effects of arsenic.