Rejuvenation of telomeres with various lengths has been found in induced pluripotent stem cells (iPSCs). Mechanisms of telomere length regulation during induction and proliferation of iPSCs remain elusive. We show that telomere dynamics are variable in mouse iPSCs during reprogramming and passage, and suggest that these differences likely result from multiple potential factors, including the telomerase machinery, telomerase-independent mechanisms and clonal influences including reexpression of exogenous reprogramming factors. Using a genetic model of telomerase-deficient (Terc(-/-) and Terc(+/-)) cells for derivation and passages of iPSCs, we found that telomerase plays a critical role in reprogramming and self-renewal of iPSCs. Further, telomerase maintenance of telomeres is necessary for induction of true pluripotency while the alternative pathway of elongation and maintenance by recombination is also required, but not sufficient. Together, several aspects of telomere biology may account for the variable telomere dynamics in iPSCs. Notably, the mechanisms employed to maintain telomeres during iPSC reprogramming are very similar to those of embryonic stem cells. These findings may also relate to the cloning field where these mechanisms could be responsible for telomere heterogeneity after nuclear reprogramming by somatic cell nuclear transfer.