Patients with dyskeratosis congenita (DC), a disorder of telomere maintenance, suffer degeneration of multiple tissues. Patient-specific induced pluripotent stem (iPS) cells represent invaluable in vitro models for human degenerative disorders like DC. A cardinal feature of iPS cells is acquisition of indefinite self-renewal capacity, which is accompanied by induction of the telomerase reverse transcriptase gene (TERT). We investigated whether defects in telomerase function would limit derivation and maintenance of iPS cells from patients with DC. Here we show that reprogrammed DC cells overcome a critical limitation in telomerase RNA component (TERC) levels to restore telomere maintenance and self-renewal. We discovered that TERC upregulation is a feature of the pluripotent state, that several telomerase components are targeted by pluripotency-associated transcription factors, and that in autosomal dominant DC, transcriptional silencing accompanies a 3' deletion at the TERC locus. Our results demonstrate that reprogramming restores telomere elongation in DC cells despite genetic lesions affecting telomerase, and show that strategies to increase TERC expression may be therapeutically beneficial in DC patients.