Reconstitution of telomerase activity is proposed as a potential gene therapy to prevent, or rescue, age-related diseases produced by critical telomere shortening. However, it is not known whether or not short telomeres are irreversibly damaged. We addressed this by re-introducing telomerase in late generation telomerase-deficient mice, Terc−/−, which have short telomeres and show severe proliferative defects. For this, we have crossed these mice with Terc+/− mice and analyzed telomere length, chromosomal instability and premature aging of the progeny. The Terc−/− progeny had one set of chromosomes with normal telomeres, whereas the other set remained with critically short telomeres; these mice presented chromosomal instability and premature aging. In contrast, Terc+/− progeny showed all chromosomes with detectable telomeres, and did not show chromosomal instability or premature aging. These results prove that critically short telomeres can be rescued by telomerase, and become fully functional, thus rescuing premature aging. This has important implications for the future design of telomerase-based gene therapy of age-related diseases.