Nasopharyngeal carcinoma (NPC) is a common cancer in Southern China and Southeast Asia. The disease is a poorly differentiated carcinoma without effective cure, and the mechanism underlying its development remains largely unknown. Of several factors identified in NPC aetiology in recent years, Epstein-Barr virus (EBV) infection has emerged to be most important. In almost all NPC cells, EBV uses several intracellular mechanisms to cause oncogenic evolution of the infected cells. One such mechanism by which EBV infection induces cellular immortalization is believed to be through the activation of telomerase, an enzyme that is normally repressed but becomes activated during cancer development. Studies show that greater than 85% of primary NPC display high telomerase activity by mechanisms involving EBV infection, consistent with the notion that EBV is commonly involved in inducing cell immortalization. More recently, different EBV proteins have been shown to activate or inhibit the human telomerase reverse transcriptase gene, by modulating intracellular signalling pathways. These findings suggest a new model with a number of challenges towards our understanding, molecular targeting and therapeutic intervention in NPC.