Normal human somatic cells have a finite life span and undergo replicative senescence after a limited number of cell divisions. Erosion of telomeric DNA has emerged as a key factor in senescence, which is antagonized during cell immortalization and transformation. To clarify the involvement of telomerase in the immortalization of keratinocytes, catalytic subunit of telomerase (hTERT) expression was restored in normal human esophageal epithelial cells (EPC2). EPC2-hTERT cells overcame senescence and were immortalized without p16^INK4a genetic or epigenetic alterations. p16^INK4a was expressed at moderate levels and remained functional as evidenced by induction with UV treatment and binding to cyclin-dependent kinase 4 and 6. There were no mutations in the p53 gene, and p53 was functionally intact. Importantly, senescence could be activated in the immortalized EPC2-hTERT cells by overexpression of oncogenic H-ras or p16^INK4a. Furthermore, the EPC2-hTERT cells yielded basal cell hyperplasia in an innovative organotypic culture system in contrast to a normal epithelium from parental cells. These comprehensive results indicate that the expression of telomerase induces immortalization of normal human esophageal keratinocytes without inactivation of p16^INK4a/pRb pathway or abrogation of the p53 pathway.