Activation of the peroxisome proliferator-activated receptor (PPAR) γ, the molecular target for insulin sensitizing thiazolidinediones used in patients with type 2 diabetes, inhibits vascular smooth muscle cell (VSMC) proliferation and prevents atherosclerosis and neointima formation. Emerging evidence indicates that telomerase controls key cellular functions including replicative lifespan, differentiation, and cell proliferation. In the present study, we demonstrate that ligand-induced and constitutive PPARγ activation inhibits telomerase activity in VSMCs. Telomerase reverse transcriptase (TERT) confers the catalytic activity of telomerase, and PPARγ ligands inhibit TERT expression through a receptor-dependent suppression of the TERT promoter. 5′-deletion analysis, site-directed mutagenesis, and transactivation studies using overexpression of Ets-1 revealed that suppression of TERT transcription by PPARγ is mediated through negative cross-talk with Ets-1–dependent transactivation of the TERT promoter. Chromatin immunoprecipitation assays further demonstrated that PPARγ ligands inhibit Ets-1 binding to the TERT promoter, which is mediated at least in part through an inhibition of Ets-1 expression by PPARγ ligands. In VSMCs overexpressing TERT, the efficacy of PPARγ ligands to inhibit cell proliferation is lost, indicating that TERT constitutes an important molecular target for the antiproliferative effects of PPARγ ligands. Finally, we demonstrate that telomerase activation during the proliferative response after vascular injury is effectively inhibited by PPARγ ligands. These findings provide a previously unrecognized mechanism for the antiproliferative effects of PPARγ ligands and support the concept that PPARγ ligands may constitute a novel therapeutic approach for the treatment of proliferative cardiovascular diseases.