Telomeres are essential for genomic stability and cell viability. Telomerase, the enzyme responsible for telomere maintenance, is composed of a reverse transcriptase protein subunit and an integral RNA component which contains the templating domain. In human telomerase, the template region consists of 11 nt (3'-rCAAUCCCAAUC-5') and comprises an alignment domain (italicised) plus a template sequence encoding the telomeric repeat d(GGT TAG). In this study, the alignment domain of human telomerase was systematically reduced from the 3' end and the resultant recombinant enzyme activity was evaluated in vitro. Deletion or substitution of one or two residues from the 3' end of the alignment domain caused only a slight reduction in overall catalytic activity and did not alter the processivity of the enzyme. Deletion or substitution of three or more residues from the 3' end of the alignment domain resulted in total loss of catalytic activity. These results suggest that the two most 3' terminal RNA residues are relevant but not essential for overall activity and that the minimal length requirement of the alignment domain is 3 nt. Furthermore, base pairing between the 3' end of the primer substrate and the first two residues of the alignment domain is also not an absolute requirement for processive synthesis.