Telomerase activity has been detected in germ cells as well as in the developing embryo. Activity is no longer detectable in most somatic cells of the neonate, although low levels of activity persist in regenerative tissues. Telomerase has been found to be reactivated or up‐regulated in the majority of cancers. The colorectal adenoma–carcinoma sequence is one of the best‐characterized models of multistep tumourigenesis and is thus suitable for determining at which stage telomerase is activated. Telomerase activity was examined by telomeric repeat amplification protocol (TRAP) assay in 96 cases of colorectal tissues, including 50 carcinomas, 31 adenomas, and 15 normal colonic tissues. For each case, histological diagnosis and telomerase activity were determined on consecutive frozen sections. In order to reduce the chance of a false‐negative TRAP assay due to RNA degradation, the integrity of rRNA in the tissues was verified in each case. Twenty‐five carcinomas, 30 adenomas, and all of the 15 normal colorectal mucosal samples showed no or only partial rRNA degradation and only in these cases was the TRAP assay interpreted. None of the normal tissues exhibited telomerase activity. In contrast, all of the 25 cancers and 47 per cent (14/30) of the adenomas were positive. In adenomas, telomerase activation was highly significantly related to the grade of dysplasia ( p< 0·0001). All adenomas which contained high‐grade dysplasia revealed telomerase activity, whereas telomerase activity was detectable in only 20 per cent (4/20) of cases with exclusively low‐grade dysplasia. These results indicate that telomerase activation, which may be an obligatory step in colorectal carcinogenesis, occurs in the progression from low‐grade to high‐grade dysplasia in adenomas. Furthermore, in the adenoma–carcinoma sequence, telomerase activation seems to occur later than K‐ ras mutation but earlier than p53 mutation. Copyright © 1999 John Wiley & Sons, Ltd.