This article reviews the current understanding of the involvement of telomerase in in vitro immortalisation of human cells. In vitro immortalisation with DNA tumour viruses or chemicals usually occurs in two phases. The first stage is an extension of lifespan beyond that at which cells would normally senesce, after which the culture enters a period of crisis. The second stage involves the escape from crisis of a rare cell in the culture, which goes on to proliferate indefinitely. The hypothesis that telomere shortening acts as a signal for senescence and crisis, and that cells need to activate telomerase to survive these states, gained support from early studies examining telomere behaviour and telomerase activity in immortalised cell lines. In many cases, telomeres were found to continue to shorten during the phase of extended lifespan, and no telomerase was detectable. Cells which survived crisis had activated telomerase and had stable or lengthened telomeres. However, it is now clear that this model does not apply to all cell lines. Approximately a quarter of in vitro immortalised cell lines so far examined have no detectable telomerase activity, yet have very long and heterogeneous telomeres. These cell lines have acquired a novel mechanism for lengthening their telomeres, named ALT (Alternative Lengthening of Telomeres). The nature of ALT is not yet understood, but may involve non-reciprocal recombination between telomeres. ALT is not merely a phenomenon of in vitro immortalised cell lines, but has also been found in tumours and tumour-derived cell lines. Furthermore, there are a number of cell lines which have been shown to have low levels of telomerase prior to crisis while telomere shortening is still occurring, and the function of these low levels of telomerase activity is unknown.