Maintenance of telomere length is predicted to be essential for bypass of senescence and crisis checkpoints in cancer cells. The impact of telomere dysfunction on tumorigenesis was assessed in successive generations of mice doubly null for the telomerase RNA (mTR) and the INK4a tumor suppressor genes. Significant reductions in tumor formation in vivo and oncogenic potential in vitro were observed in late generations of telomerase deficiency, coincident with severe telomere shortening and associated dysfunction. Reintroduction of mTR into cells significantly restored the oncogenic potential, indicating telomerase activation is a cooperating event in the malignant transformation of cells containing critically short telomeres. The results described here demonstrate that loss of telomere function in a cancer-prone mouse model possessing intact DNA damage responses impairs, but does not prevent, tumor formation.