Telomerase is a ribonucleoprotein with an intrinsic telomerase RNA (TER) component. Within yeasts, TER is remarkably large and presents little similarity in secondary structure to vertebrate or ciliate TERs. To better understand the evolution of fungal telomerase, we identified 74 TERs from Pezizomycotina and Taphrinomycotina subphyla, sister clades to budding yeasts. We initially identified TER from Neurospora crassa using a novel deep-sequencing–based approach, and homologous TER sequences from available fungal genome databases by computational searches. Remarkably, TERs from these non-yeast fungi have many attributes in common with vertebrate TERs. Comparative phylogenetic analysis of highly conserved regions within Pezizomycotina TERs revealed two core domains nearly identical in secondary structure to the pseudoknot and CR4/5 within vertebrate TERs. We then analyzed N. crassa and Schizosaccharomyces pombe telomerase reconstituted in vitro, and showed that the two RNA core domains in both systems can reconstitute activity in trans as two separate RNA fragments. Furthermore, the primer-extension pulse-chase analysis affirmed that the reconstituted N. crassa telomerase synthesizes TTAGGG repeats with high processivity, a common attribute of vertebrate telomerase. Overall, this study reveals the common ancestral cores of vertebrate and fungal TERs, and provides insights into the molecular evolution of fungal TER structure and function.