The up-regulated expression and telomerase activity of human telomerase reverse transcriptase (hTERT) are hallmarks of tumorigenesis. The hTERT promoter has been shown to promote hTERT gene expression selectively in tumor cells but not in normal cells. However, little is known about how tumor cells differentially activate hTERT transcription and induce telomerase activity. In this study, we identified activating enhancer-binding protein-2beta (AP-2beta) as a novel transcription factor that specifically binds to and activates the hTERT promoter in human lung cancer cells. AP-2beta was detected in hTERT promoter DNA-protein complexes formed in nuclear extracts prepared only from lung cancer cells but not from normal cells. We verified the tumor-specific binding activity of AP-2beta for the hTERT promoter in vitro and in vivo and detected high expression levels of AP-2beta in lung cancer cells. We found that ectopic expression of AP-2beta reactivated hTERT promoter-driven reporter green fluorescent protein (GFP) gene and endogenous hTERT gene expression in normal cells, enhanced GFP gene expression in lung cancer cells, and prolonged the life span of primary lung bronchial epithelial cells. Furthermore, we found that inhibition of endogenous AP-2beta expression by AP-2beta gene-specific small interfering RNAs effectively attenuated hTERT promoter-driven GFP expression, suppressed telomerase activity, accelerated telomere shortening, and inhibited tumor cell growth by induction of apoptosis in lung cancer cells. Our results demonstrate the tumor-specific activation of the hTERT promoter by AP-2beta and imply the potential of AP-2beta as a novel tumor marker or a cancer therapeutic target.