Human telomerase reverse transcriptase (hTERT) is central to maintain telomeres for continuous cell proliferation, but it remains unknown how extracellular cues regulate telomerase maintenance of telomeres. Here we report that the cytokine bone morphogenetic protein-7 (BMP7) induces Smad3 phosphorylation, nuclear translocation, and hTERT gene repression. BMP7 induces Smad3-dependent telomerase inhibition in a time- and concentration-dependent manner in breast cancer cells. Chronic exposure of breast cancer cells to BMP7 results in short telomeres, cell senescence, and apoptosis. Mutation of BMPRII receptor, but not TGFbetaRII, ACTRIIA, or ACTRIIB, blocked BMP7-induced repression of the hTERT gene promoter activity, leading to increased telomerase activity, lengthened telomeres, and continued cell proliferation. Expression of hTERT inhibits BMP7-induced breast cancer cell senescence and apoptosis. Thus, our data suggest that BMP7 induces breast cancer cell aging and death by a mechanism involving inhibition of telomerase activity and telomere maintenance via BMPRII receptor- and Smad3-mediated repression of the hTERT gene.