In most human primary bone cells, SV40 T-antigen expression was able to expand life span for a few passages before cells undergo growth arrest, described as crisis. In this study, telomerase activity was reconstituted in human osteoblast precursors (hPOB cells) and marrow stromal cells (Saka cells) transformed with the SV40 T antigen. Bone cells with telomerase activity were able to bypass crisis and show unlimited life span. Despite chromosomal aberrations observed in hPOB-tert cells, these immortalized precursors were able to differentiate into osteoblasts like precrisis hPOB cells. Saka-tert cells enhanced the formation of human osteoclast-like cells in a similar manner as Saka cells. These results demonstrate that reconstitution of telomerase activity in transformed SV40 T-antigen human osteoblast precursors or marrow stromal cells leads to the generation of immortalized cells with a preserved phenotype.