Telomerase is a ribonucleoprotein consisting of a catalytic subunit, the telomerase reverse transcriptase (TERT), and an integrally associated RNA that contains a template for the synthesis of short repetitive G-rich DNA sequences at the ends of telomeres. Telomerase can repetitively reverse transcribe its short RNA template, acting processively to add multiple telomeric repeats onto the same DNA substrate. The contribution of enzyme processivity to telomere length regulation in human cells is not well characterized. In cancer cells, under homeostatic telomere length-maintenance conditions, telomerase acts processively, whereas under nonequilibrium conditions, telomerase acts distributively on the shortest telomeres. To investigate the role of increased telomerase processivity on telomere length regulation in human cells with limited lifespan that are dependent on human TERT for lifespan extension and immortalization, we mutated the leucine at position 866 in the reverse transcriptase C motif of human TERT to a tyrosine (L866Y), which is the amino acid found at the equivalent position in HIV-1 reverse transcriptase. We report that, similar to the previously reported gain-of-function Tetrahymena telomerase mutant (L813Y), the human telomerase variant displays increased processivity. Human TERT-L866Y, like wild-type human TERT, can immortalize and extend the lifespan of limited-lifespan cells. Moreover, cells expressing human TERT-L866Y display heterogenous telomere lengths, telomere elongation, multiple telomeric signals indicative of fragile sites and replicative stress, and an increase in short telomeres, which is accompanied by telomere trimming events. Our results suggest that telomere length and homeostasis in human cells may be regulated by telomerase enzyme processivity.