Telomerase is a ribonucleoprotein reverse transcriptase that synthesizes and maintains telomeric DNA. Studies of telomeres and telomerase are facilitated by the large number of linear DNA molecules found in ciliated protozoa, such as Tetrahymena thermophila. To examine the expression of telomerase, we investigated the transcription of the RNA polymerase III-directed gene encoding the RNA subunit (TER1) of this enzyme. A chimeric gene containing the Glaucoma chattoni TER1 transcribed region flanked by 5' and 3' Tetrahymena regions was used to identify promoter elements following transformation of Tetrahymena cells. Disruption of a conserved proximal sequence element (PSE) located at -55 in the Tetrahymena TER1 5' flanking region eliminated expression of the chimeric gene. In addition, mutation of an A/T-rich element at -25 decreased expression markedly. A gel mobility shift assay and protein-DNA cross-linking identified a PSE-binding polypeptide of 50-60 kDa in Tetrahymena extracts. Gel filtration analysis revealed a native molecular mass of approximately 160 kDa for this binding activity. Our results point to a similar architecture between ciliate telomerase RNA and metazoan U6 small nuclear RNA promoters.