Telomerase adds (TTAGGG)n hexanucleotide repeats to the ends of mammalian telomeres. This compensates for telomeric loss with successive rounds of cellular replication. Telomerase activity is detected in many neoplastic cells, but not in most normal somatic cells. To determine whether telomeric length and telomerase activity are associated with cellular differentiation, we measured telomeric lengths and telomerase activity in embryonic NT2 precursor cells prior to and following differentiation into post mitotic hNT neurons. This system allows for studies in a direct neuronal cell lineage and, thus, provides a unique model for studying the role of neuronal telomerase activity. Our results show that telomerase activity was present in precursor cells, but not in neuronal cells. Telomeres were consistently longer in NT2 cells than in hNT cells. These results suggest that changes in telomeric length and loss of telomerase activity play a role in neuronal cellular differentiation.