The telomerase reverse transcriptase uses an essential RNA subunit as a template to direct telomeric DNA synthesis. The 190-nucleotide Oxytricha nova telomerase RNA was identified by using an oligonucleotide probe complementary to the predicted CCCCAAAA template. This RNA displays extensive sequence similarity to the Euplotes crassus telomerase RNA and carries the same 5' CAAAACCCCAAAACC 3' telomeric domain. Antisense oligonucleotides were used to map the boundaries of the functional template and to investigate the mechanism of primer recognition and elongation. On the basis of their ability to inhibit or to prime telomerase, oligonucleotides were classified into three categories. Category 1 oligonucleotides, which extended 5' of residue 42 in the RNA, abolished elongation of (T4G4)3 and (G4T4)3 primers in vitro. In contrast, oligonucleotides terminating between residues 42 and 50 (categories 2 and 3), served as efficient telomerase primers. We conclude that the O. nova template comprises residues 42 to 50 in the 190-nucleotide RNA, a different set of nucleotides than are used by the E. crassus enzyme. Category 2 primer reactions amassed short products, and their abundance could be decreased by altering the 5' sequence of the primer, consistent with the two-primer-binding-site model for telomerase. Category 3 primers generated a bimodal distribution of short and long products, each having a unique elongation profile. The long-product profile is inconsistent with sequence-specific primer alignment. Rather, each primer was extended by the same register of TTTTGGGG repeats, suggesting shuttling to a default position within the template. The parallels between telomerase and RNA polymerase elongation mechanisms are discussed.