Transforming growth factor beta (TGF-beta) carries out tumor suppressor activity in epithelial and lymphoid cells, whereas telomerase is required for most cancers. Although the molecular mechanisms by which TGF-beta acts as a tumor suppressor are yet to be fully established, a link between TGFb and its tumor suppressor activity by telomerase has been suggested. Recently, we have noted a novel mode of action for TGF-beta through which human telomerase reverse transcriptase (hTERT) gene is repressed in immortal and neoplastic cells, confirming that one of the mechanisms underlying TGF-beta suppression of tumor growth may be through inhibiting hTERT gene transcription. Moreover, the inhibition of hTERT gene by TGF-beta suggests a cis action of the TGF-beta signaling molecule Smad3 on hTERT promoter directly. This article examines our current understanding and investigation of TGF-beta regulation of telomerase activity, and presents a model in which Smad3 participates in regulating hTERT gene transcription by acting as a repressor directly. Engineering the interface between Smad3 and hTERT gene may lead to a new strategy to inhibit telomerase activity in cancer.