Gefitinib is an anti-cancer drug that selectively inhibits epithelial growth factor receptor (EGFR) tyrosine kinase activity and induces apoptosis in many cancer cells. Cancer cells are often protected from apoptotic cell death by telomerase, however the gefitinib-induced telomerase inhibition remains unknown. Here we investigated the effects of gefitinib on telomerase activity in two different breast cancer lines, MCF-7 (low expression of EGFR) and MDA-MB-231 (high expression of EGFR). We observed the inhibition of EGFR phosphorylation that occurred only MDA-MB-231 cells cultured in media containing 10% FBS. Direct cytotoxicity was observed in MDA-MB-231 cells, but not MCF-7 cells when treated with concentrations of gefitinib ranging from 15 to 20 µM. This cytotoxicity was associated with decreased telomerase activity and downregulation of the telomerase subunit, hTERT. c-Myc has previously been shown to activate telomerase activity through transcriptional regulation of hTERT. A decrease in c-myc expression and DNA-binding activity following treatment with gefitinib was observed exclusively in MDA-MB-231 cells. We also demonstrated that gefitinib downregulates the activation of Akt and subsequent hTERT phosphorylation and translocation into the nucleus in MDA-MB-231 cells. These results indicate that gefitinib induces loss of telomerase activity through dephosphorylation of EGFR in MDA-MB-231 cells.