The telomerase ribonucleoprotein is a promising target for cancer therapy, as it is highly active in many human malignancies. A novel telomerase targeting approach combines short interfering RNA (siRNA) knockdown of endogenous human telomerase RNA (hTer) with expression of a mutant-template hTer (MT-hTer). Such combination MT-hTer/siRNA constructs induce a rapid DNA damage response, telomere uncapping, and inhibition of cell proliferation in a variety of human cancer cell lines. We tested which functional aspects of the protein catalytic component of telomerase [human telomerase reverse transcriptase (hTERT)] are required for these effects using human LOX melanoma cells overexpressing various hTERTs of known properties. Within 3 days of MT-hTer/siRNA introduction, both growth inhibition and DNA damage responses were significantly higher in the setting of wild-type hTERT versus catalytically dead hTERT or mutant hTERT that is catalytically competent but unable to act on telomeres. These effects were not attenuated by siRNA-induced knockdown of the telomeric protein human Rap1 and were additive with knockdown of the telomere-binding protein TRF2. Hence, the effects of MT-hTer/siRNA require a telomerase that is both catalytically competent to polymerize DNA and able to act on telomeres in cells.