The evolutionary origin of telomerases, enzymes that maintain the ends of linear chromosomes in most eukaryotes, is a subject of debate. Penelope-like elements (PLEs) are a recently described class of eukaryotic retroelements characterized by a GIY-YIG endonuclease domain and by a reverse transcriptase domain with similarity to telomerases and group II introns. Here we report that a subset of PLEs found in bdelloid rotifers, basidiomycete fungi, stramenopiles, and plants, representing four different eukaryotic kingdoms, lack the endonuclease domain and are located at telomeres. The 5 truncated ends of these elements are telomereoriented and typically capped by species-specific telomeric repeats. Most of them also carry several shorter stretches of telomeric repeats at or near their 3 ends, which could facilitate utilization of the telomeric G-rich 3 overhangs to prime reverse transcription. Many of these telomere-associated PLEs occupy a basal phylogenetic position close to the point of divergence from the telomerase-PLE common ancestor and may descend from the missing link between early eukaryotic retroelements and present-day telomerases.reverse transcriptase ͉ telomerase ͉ transposable elements G enomic DNA in many eukaryotes is composed, to a large extent, of transposable elements (TEs), especially retrotransposons, which multiply via an RNA intermediate copied into DNA by reverse transcriptase (RT) and inserted into new sites by an endonuclease (EN)/integrase. Although RT creates new copies, DNA cleavage is essential for TE proliferation, i.e., insertion into previously unoccupied sites. Integrases of retrovirus-like (LTR) retrotransposons insert dsDNA into chromosomes, whereas EN of non-LTR retrotransposons generate the 3ЈOH-end that primes cDNA synthesis directly onto the chromosome (target-primed reverse transcription). The only known eukaryotic RT-containing genes lacking EN domains are telomerase RTs (TERTs), which are not TEs but specialized ribonucleoprotein enzymes maintaining telomeres by repeated copying of a short segment of an unlinked template RNA, primed by the 3ЈOH end of a linear chromosome (see refs. 1-5 for review).Penelope-like elements (PLEs) are a widespread but not very extensively studied class of eukaryotic TEs characterized by a single ORF coding for RT and an unusual GIY-YIG EN domain also found in bacterial group I introns, and by the presence of spliceosomal introns in several members (4, 6). They occupy a special place in retroelement phylogeny by sharing a common ancestor with TERTs (4). PLEs insert relatively randomly throughout the genome, preferring AT-rich targets (6). Indeed, the element-encoded EN, in which the conserved residues are essential for transposition, exhibits some sequence preferences but no pronounced sequence specificity (7).Rotifers of the class Bdelloidea, a large taxon of multicellular freshwater invertebrates considered to be anciently asexual (8,9), contain a distinct group of PLEs, called Athena (4), carrying spliceosomal introns within highly conserve...