Human CD34+ hematopoietic stem and progenitor cells (HSPC) expressing fusion protein AML1-ETO (AE), generated by the t(8;21)(q22;q22) rearrangement, manifest enhanced self-renewal and dysregulated differentiation without leukemic transformation, representing a pre-leukemia stage. Enabling replicative immortalization via telomerase reactivation is a crucial step in cancer development. However, AE expression alone is not sufficient to maintain high telomerase activity to immortalize human HSPC cells, which may hamper transformation. Here, we investigated the cooperativity of telomerase reverse transcriptase (hTERT), the catalytic subunit of telomerase, and AE in disease progression. Enforced expression of hTERT immortalized human AE pre-leukemia cells in a telomere-lengthening independent manner, and improved the pre-leukemia stem cell function by enhancing cell proliferation and survival. AE-hTERT cells retained cytokine dependency and multi-lineage differentiation potential similar to parental AE clones. Over the short-term, AE-hTERT cells did not show features of stepwise transformation, with no leukemogenecity evident upon initial injection into immunodeficient mice. Strikingly, after extended culture, we observed full transformation of one AE-hTERT clone, which recapitulated the disease evolution process in patients and emphasizes the importance of acquiring cooperating mutations in t(8;21) AML leukemogenesis. In summary, achieving unlimited proliferative potential via hTERT activation, and thereby allowing for acquisition of additional mutations, is a critical link for transition from pre-leukemia to overt disease in human cells. AE-hTERT cells represent a tractable model to study cooperating genetic lesions important for t(8;21) AML disease progression.