Telomerase catalytic subunit (hTERT) has been shown to play a critical role not only in telomere homeostasis but also in cellular survival, DNA repair, and genetic stability. In a previous study, we described that tumor necrosis factor-xalpha (TNFxalpha) induced in the leukemic KG1 cells a senescence state characterized by decreased hTERT activity followed by prolonged growth arrest, increasedx beta-galactosidase activity, telomere shortening, and major chromosomal instability. Interestingly, granulocyte-macrophage colony-stimulating factor (GM-CSF) abrogated all these events. In the present study, we show for the first time that TNFxalpha acts by inhibiting the hTERT gene in both normal CD34x+ cells and fresh leukemic cells. Using KG1 cells as a representative cellular model, we show that TNFxalpha induced sphingomyelin hydrolysis, ceramide production, and c-Jun N-terminal kinase (JNK) activation, all of which are critical components of TNFxalpha signaling, resulting in hTERT gene inhibition. Moreover, we provide evidence that the protective effect of GM-CSF is related to its capacity to interfere with both ceramide generation and ceramide signaling. Negative regulation of the hTERT gene may represent one mechanism by which TNFxalpha interferes with normal hemopoiesis.