Maintenance of telomere length and structure is essential for cell survival. Telomere synthesis is mediated by the ribonucleoprotein telomerase in 90% of cancer cells, and is regulated mainly by transcription of the human telomerase reverse transcriptase subunit, hTERT. However, transcriptome analysis reveals complex splicing patterns and to date, twenty-two alternatively-spliced hTERT mRNAs have been reported, yet their functions have not been fully elucidated. The best characterized hTERT spliced variants encode for inactive proteins that possess specific deletions within the hTERT catalytic domains. We studied two less well characterized hTERT splice variants (termed INS3 and 4) that encode proteins with intact reverse transcriptase motifs, but alternative C-domains due to insertion of intronic sequences. We determined the prevalence of these mRNA variants in primary cells, telomerase-positive cells and in alternative lengthening of telomere (ALT) cells and found the transcripts to be expressed mainly in telomerase-positive cell lines and to be translated into proteins as illustrated by their association with polysomes. These variants were inactive when expressed in vitro or in cells, retained DNA substrate binding in vitro but were impaired in binding the telomerase RNA component when expressed in, and immunoprecipitated from either telomerase-positive or telomerase-negative ALT cells coexpressing the telomerase RNA component. Stable expression of INS3 and INS4 variants in a hepatocarcinoma cell line inhibited telomerase activity, shortened telomeres and slowed cell growth suggesting a potential dominant-negative function.