The aim of our study was to prospectively evaluate the potential diagnostic value and clinical applicability of quantitative analysis of telomerase subunits gene expression in urine for noninvasive detection of bladder cancer. Expression levels of human telomerase reverse transcriptase (hTERT) and human telomerase RNA (hTR) were analyzed by real-time reverse transcriptase polymerase chain reaction (RT-PCR) in urine samples from 163 subjects with bladder cancer and 237 controls (163 individuals with benign genitourinary diseases; 74 healthy subjects). The sensitivity, specificity and optimal cutoffs were determined and compared to the corresponding values obtained by voided urine cytology. Quantitative urinary hTR analysis detects bladder cancer with an overall sensitivity of 77.0%, whereas hTERT analysis reached a sensitivity of 55.2%. The majority of undetected tumors were small, low-grade pTa lesions. Both hTR and hTERT proved to be significantly more sensitive than cytology (34.5%; p < 0.001). Specificities for hTR, hTERT and cytology were 72.1%, 85.0% and 92.7%, respectively, in the total study population and 96.9%, 89.2% and 100%, respectively, in healthy subjects. Higher diagnostic accuracy was achieved by hTR than by hTERT analysis (p < 0.05). The specificity of hTR increased to 85.0% in the total population if urinary leukocyte contamination was excluded. These data suggest that quantitative hTR analysis is the most accurate telomerase-based test for bladder cancer detection and has the potential to replace cytology as a noninvasive biomarker for disease diagnosis and follow-up.