Telomeres serve to camouflage chromosome ends from the DNA damage response machinery. Telomerase activity is required to maintain telomeres. One consequence of telomere dysfunction is cellular senescence, a permanent growth arrest state. We review the key regulators of cellular senescence and recent in vivo evidence which supports p53-dependent senescence induced by short telomeres as a potent tumor suppressor pathway. The in vivo link between cellular senescence and tumor regression is also discussed. The relationship between short telomere length and ageing or disease states in various cells of the body is increasingly reported. Paradoxically, the introduction of telomerase is proposed as a method to combat ageing via cell therapy and a possible method to regenerate tissue, while telomerase inhibition and telomere shortening is suggested as a possible therapy to defeat cancers with intact p53. Researchers thus face the challenge of understanding the complex processes which regulate the potential benefits of both telomerase inhibition and activation.