Telomere dysfunction contributes to reduced cell viability, altered differentiation, and impaired regenerative/proliferative responses. Recent advances indicate that telomerase activity confers a pro-angiogenic phenotype to endothelial cells and their precursors. We have investigated whether telomerase contributes to tissue regeneration following hind limb ischemia and vascular endothelial growth factor 165 (VEGF(165)) treatment. VEGF delivery induced angiogenesis and increased expression of the telomerase reverse transcriptase (TERT) and telomerase activity in skeletal muscles and satellite and endothelial cells. Adenovirus-mediated transfer of wild type TERT but not of a dominant negative mutant, TERTdn, significantly induced capillary but not arteriole formation. However, when co-delivered with VEGF, TERTdn abrogated VEGF-dependent angiogenesis, arteriogenesis, and blood flow increase. This effect was paralleled by in vitro evidence that telomerase inhibition by 3'-azido-3'-deoxythymidine in VEGF-treated endothelial cells strongly reduced capillary density and promoted apoptosis in the absence of serum. Similar results were obtained with adenovirus-mediated expression of TERTdn and AKTdn, both reducing endogenous TERT activity and angiogenesis on Matrigel. Mechanistically, neo-angiogenesis in our system involved: (i) VEGF-dependent activation of telomerase through the nitric oxide pathway and (ii) telomerase-dependent activation of endothelial cell differentiation and protection from apoptosis. Furthermore, detection of TERT in activated satellite cells identified them as VEGF targets during muscle regeneration. Because TERT behaves as an angiogenic factor and a downstream effector of VEGF signaling, telomerase activity appears required for VEGF-dependent remodeling of ischemic tissue at the capillaries and arterioles level.