Telomere shortening limits the proliferation of primary human cells in culture by the induction of senescence. There is evidence for telomere shortening in most human tissues during aging and chronic disease. In addition, telomerase mutations are associated with shortened telomeres, impaired organ maintenance, and a shortened lifespan in humans. Studies on telomerase knockout mice have shown that telomere shortening predominantly affects maintenance of organ systems with high rates of cell turnover, indicating that telomere function is important for organs that are constantly replenished from stem cells. These studies also showed that telomere dysfunction induces different cellular outcomes in vivo including cell cycle arrest, apoptosis, and impairment of stem cell function. However, mice with dysfunctional telomeres did not exhibit an accumulation of senescent cells, indicating that, in contrast to in vitro cultures, senescent cells do not persist in vivo in mice. In this chapter, we summarize our current knowledge on consequences of telomere dysfunction on stem cells and tissue aging.