The cytokine IFN-α is secreted during viral infections and has been shown to inhibit telomerase activity and accelerate T cell differentiation in vivo. However, the mechanism for this inhibition is not clear. In this study, we show that IFN-α inhibits both the transcription and translation of human telomerase reverse transcriptase (hTERT), the catalytic component of telomerase, in activated CD8(+) T cells. This was associated with increased activity of the repressor of hTERT transcription E2 transcription factor and decreased activation of NF-κB that promotes hTERT transcription. However IFN-α did not affect the translocation of hTERT from the cytoplasm to the nucleus. IFN-α also inhibits AKT kinase activation but increases p38 MAPK activity, and both of these events have been shown previously to inhibit telomerase activity. Addition of BIRB796, an inhibitor of p38 activity, to IFN-α-treated cells reversed, in part, the inhibition of telomerase by this cytokine. Therefore, IFN-α can inhibit the enzyme telomerase in CD8(+) T cells by transcriptional and posttranslational mechanisms. Furthermore, the addition of IFN-α to CD8(+)CD27(+)CD28(+) T cells accelerates the loss of both these costimulatory molecules. This suggests that persistent viral infections may contribute to the accumulation of highly differentiated/senescent CD8(+)CD27(-)CD28(-) T cells during aging by promoting IFN-α secretion during repeated episodes of viral reactivation.