Autosomal-dominant dyskeratosis congenita is associated with heterozygous mutations in telomerase. To examine the dosage effect of telomerase, we generated a line of mTR+/ÿ mice on the CAST/EiJ background, which has short telomeres. Interbreeding of heterozygotes resulted in progressive telomere shortening, indicating that limiting telomerase compromises telomere mainte- nance. In later-generation heterozygotes, we observed a decrease in tissue renewal capacity in the bone marrow, intestines, and testes that resembled defects seen in dyskeratosis congenita patients. The pro- gressive worsening of disease with decreasing telomere length suggests that short telo- meres, not telomerase level, cause stem cell failure. Further, wild-type mice derived from the late-generation heterozygous parents, termed wt*, also had short telomeres and displayed a germ cell defect, indicating that telomere length determines these phenotypes. We propose that short telomeres in mice that have normal telomerase levels can cause an occult form of genetic disease