Telomerase, a ribonucleoprotein enzyme mainly consisted of a catalytic protein subunit human telomerase reverse transcriptase (hTERT) and a human telomerase RNA component, is responsible for maintaining telomeres. Telomerase over-expression correlates significantly with tumors and is a prognostic marker. However, telomerase over-expression in breast cancers and the effect of telomerase inhibition as a candidate cancer therapy are unknown. We used the dominant-negative mutant of hTERT (DN-hTERT) to inhibit telomerase activity on human breast adenocarcinoma cell line MCF-7 by transfection. Telomeric repeat amplification protocol assays and real-time quantitative RT-PCR were performed to investigate telomerase activity as well as expression of hTERT. Telomere length was measured by the flow-fluorescence in situ hybridization assay. Cell proliferation was assessed by the WST-8 assay, and apoptosis was evaluated by flow cytometry. The tumor formation ability of MCF-7 cells was investigated by transplanting cells subcutaneously into BALB/c nude mice. Ectopic expression of DN-hTERT caused dramatically inhibition of telomerase activity and reduction of telomere length. Telomerase inhibition induced growth arrest and apoptosis of MCF7 cells in vitro and loss of tumorigenic properties in vivo. This study shows that telomerase inhibition by DN-hTERT can effectively inhibit the cell viability and tumorigenicity of MCF7 cells and is an attractive approach for breast cancer therapy.