Telomerase activation is regulated by the expression of human telomerase reverse transcriptase (hTERT) and is a key step in the development of human cancers. Interferon-gamma (IFN-gamma) signaling induces growth arrest in many tumors through multiple regulatory mechanisms. The p27 tumor suppressor protein inhibits the formation of tumors through the induction of cell cycle arrest and/or apoptosis. We demonstrate here that p27Kip1 inhibits hTERT mRNA expression and telomerase activity through post-transcriptional up-regulation by IFN-gamma/IRF-1 signaling. The ectopic expression of p27 suppressed hTERT expression and telomerase activity in human cervical cancer cell lines, HeLa and HT3. Furthermore, hTERT promoter activity of mouse embryonic fibroblasts (MEFs) deficient in p27 (p27-/- MEFs) was significantly higher than that of wild-type MEFs. Overexpression of p27 suppressed hTERT promoter activity and telomerase activity of p27-/- MEFs. In addition p27 down-regulated E7 protein expression and in transiently transfected HeLa cells, E7 increased hTERT promoter activity. In conclusion, we propose that inhibition of the hTERT expression and telomerase activity may be a novel tumor suppressor function of p27.