Studies were conducted to directly test whether the introduction of telomerase protects cancer-prone human mammary epithelial cells from chromosomal instability and spontaneous immortalization. Using a model for Li Fraumeni Syndrome (LFS), infection of human telomerase resulted in maintenance of telomere lengths, extension of in vitro lifespan, and prevention of spontaneous immortalization. In stark contrast to the spontaneously immortalized LFS cells, cells expressing ectopic telomerase displayed a remarkably stable karyotype and even after >150 population doublings, did not express endogenous telomerase. Since the hTERT-infected and spontaneously immortal LFS cells, like the parental cells, exhibit loss of p53 function, our data suggests that telomere shortening is the primary driving force for the genomic instability characteristic of LFS cells, while p53 inactivation is necessary for triggering the spontaneous immortalization event. Collectively, our data indicate that exogenous telomerase prevents chromosomal instability and spontaneous immortalization of LFS cells, suggesting a unique protective role for telomerase in the progression to immortalization.