Telomerase is a specialized reverse transcriptase (RT) containing an intrinsic telomerase RNA (TR) component. It synthesizes telomeric DNA repeats, (GGTTAG)n in humans, by reiteratively copying a precisely defined, short template sequence from the integral TR. The specific mechanism of how the telomerase active site uses this short template region accurately and efficiently during processive DNA repeat synthesis has remained elusive. Here we report that the human TR template, in addition to specifying the DNA sequence, is embedded with a single-nucleotide signal to pause DNA synthesis. After the addition of a dT residue to the DNA primer, which is specified by the 49 rA residue in the template, telomerase extends the DNA primer with three additional nucleotides and then pauses DNA synthesis. This sequence-defined pause site coincides precisely with the helix paired region 1 (P1)-defined physical template boundary and precludes the incorporation of nontelomeric nucleotides from residues outside the template region. Furthermore, this sequence-defined pausing mechanism is a key determinant, in addition to the P1-defined template boundary, for generating the characteristic 6-nt ladder banding pattern of telomeric DNA products in vitro. In the absence of the pausing signal, telomerase stalls nucleotide addition at multiple sites along the template, generating DNA products with heterogeneous terminal repeat registers. Our findings demonstrate that this unique self-regulating mechanism of the human TR template is essential for high-fidelity synthesis of DNA repeats.