We investigate a model of cell division in which the length of telomeres within a cell regulates its proliferative potential. At each division, telomeres undergo a systematic length decrease as well as a superimposed fluctuation due to exchange of telomere DNA between the two daughter cells. A cell becomes senescent when one or more of its telomeres become shorter than a critical length. We map this telomere dynamics onto a biased branching-diffusion process with an absorbing boundary condition whenever any telomere reaches the critical length. Using first-passage ideas, we find a phase transition between finite lifetime and immortality (infinite proliferation) of the cell population as a function of the influence of telomere shortening, fluctuations, and cell division.