Chronic psychological stress and nutritional deficiencies are factors that impact negatively on human health and disease risk. Chronic stress has been associated with accelerated leukocyte telomere shortening in numerous cohorts, however, a mechanistic link has proven elusive. This study tested the hypotheses that chronic exposure to the stress hormone, cortisol, causes telomere shortening and chromosome instability (CIN) in vitro, and that these effects would be further exacerbated by folate (vitamin B9) deficiency. Primary human lymphocytes were maintained in vitro for 12 days in medium containing either 25 nM folic acid (FA(low)) or 100 nM FA (FA(high)), together with either 0, 400, 1000 or 3500 nM cortisol. The interactive effects of cortisol and FA were examined by comparing telomere length (TL), biomarkers of DNA damage, and cytostasis. At day 12 TL was 5-17% longer in lymphocytes cultured in FA(low) conditions (mean ± SD;10.2% ± 1.6), compared with those in FA(high) medium (9.1% ± 1, p = 0.02). Refuting the hypothesis, TL was consistently greater in the presence of cortisol. The effect of FA deficiency on the frequency of DNA damage was significant for nucleoplasmic bridges, circular nuclei, micronuclei and nuclear buds, (p < 0.0001-0.001). The effect of cortisol, however, was negligible, only reaching statistical significance for the frequency of fused nuclei (p = 0.04). Cortisol was significantly associated with reduced cell division and growth and had an apparent protective effect on cell viability in the FA(low) conditions. Conclusions: Both chronic cortisol exposure, and folate deficiency, resulted in telomere elongation, however, the effect of cortisol was marginal relative to that of folate. Cortisol was not associated with increased chromosomal instability, but caused a significant reduction in cell division and growth. Together these results indicate that cortisol is not directly genotoxic and that the telomere shortening associated with increased psychological stress in vivo may not be explained by a direct effect of cortisol.