It has been proposed that the biological clock underlying the limited division potential of eukaryotic cells is telomere length. We assayed telomerase activity in single cells of the hematopoietic and immune systems. We examined hematopoietic stem cells at four stages of differentiation, lineage-committed progenitors, and mature myeloid and lymphoid cells. The frequency of telomerase-expressing cells within each population was proportional to the frequency of cells thought to have self-renewal potential. Among bone marrow hematopoietic stem cells, 70% exhibited detectable telomerase activity. The telomerase-expressing somatic cells observed in this study are not thought to be immortal, and expression was not correlated with cell cycle distribution or differentiation state. This study demonstrates that the developmental characteristic most consistently associated with telomerase expression is self-renewal potential.