Telomerase activity and telomere length in mononuclear cells (MNCs) and granulocytes from peripheral blood (PB) and bone marrow (BM) specimens were studied in pediatric acute leukemia (ALL, n = 15; AML, n = 11) and pediatric solid tumor (ST) patients (n = 9) at diagnosis, during and after chemotherapy. In four ST patients, tumor tissue was also available. For comparative analysis, MNCs from healthy donors (n = 53) were analyzed. Telomerase was evaluated using a modified telomeric repeat amplification protocol (TRAP) assay, and telomere length by terminal restriction fragment (TRF) analysis. At diagnosis, high telomerase activity was detected in MNCs from all leukemia patients, which was similar to the activity from ST biopsy specimens. This exceeded by 10- to 20-fold the activity in PB MNCs from ST patients and healthy donors (P < 0.05). Granulocyte fractions lacked telomerase activity in all groups. BM MNCs in leukemia patients revealed a four-fold higher telomerase activity than PB (P = 0.005). After induction chemotherapy and response to treatment, telomerase activity decreased to borderline or undetectable levels in PB MNCs in leukemia (P < 0.01). Average telomeres in PB MNCs from pediatric patients were significantly longer (n = 25; 10.9 kbp) than telomeres in PB and BM MNCs from adult healthy donors (7.45 kbp) (P < 0.0001). At diagnosis, telomeres were shorter from BM compared to PB specimens in leukemia (P < 0.05), and two peak TRFs were observed corresponding to the malignant and normal cell clones. With the attainment of remission, the lower TRF peak, reflecting the leukemic population, was lost. In leukemia patients, mean TRFs increased on average 2.2 kbp after induction chemotherapy, but decreased thereafter on consolidation and maintenance chemotherapy (1 kbp). This was comparable to an average telomere loss of 1.2 kbp in PB specimens from ST patients after chemotherapy. In all patients, telomere loss in granulocytes as compared to MNCs was more pronounced with 1.8 vs 1 kbp, respectively (P = 0.014). Our results demonstrate that at diagnosis, telomerase was consistently and highly upregulated in BM and PB specimens in leukemia, decreased after induction therapy, and correlated with remission. BM specimens in leukemia had higher telomerase activity, probably due to the greater leukemic burden than in PB. Telomeres were significantly longer in children than in adults, but shortened as a consequence of chemotherapy with repeated cycles of hematopoietic regeneration. In acute leukemia, with the loss of the leukemic burden after induction chemotherapy, longer mean TRFs were found, a reflection of the repopulation with normal cells. Our findings suggest that telomerase activity may be useful in the management of childhood malignancies. The significance of telomere length shortening in pediatric patients undergoing chemotherapy and possible telomere regeneration after myelosuppressive treatment remain to be determined.