The telomeric single-strand DNA binding protein protection of telomeres 1 (POT1) protects telomeres from rapid degradation in Schizosaccharomyces pombe and has been implicated in positive and negative telomere length regulation in humans. Human POT1 appears to interact with telomeres both through direct binding to the 3' overhanging G-strand DNA and through interaction with the TRF1 duplex telomere DNA binding complex. The influence of POT1 on telomerase activity has not been studied at the molecular level. We show here that POT1 negatively effects telomerase activity in vitro. We find that the DNA binding activity of POT1 is required for telomerase inhibition. Furthermore, POT1 is incapable of inhibiting telomeric repeat addition to substrate primers that are defective for POT1 binding, suggesting that in vivo, POT1 likely affects substrate access to telomerase.