Telomerase is expressed in adult mouse, but not in most human, tissues and mouse telomeres are much longer than those in humans. This interspecies difference of telomere homeostasis poses a challenge in modeling human diseases using laboratory mice. Using chromatinized bacterial artificial chromosome reporters, we discovered that the 5' intergenic region, introns 2 and 6 of human telomerase gene (hTERT) were critical for regulating its promoter in somatic cells. Accordingly, we engineered a humanized gene, hmTert, by knocking-in a 47-kilobase hybrid fragment containing these human non-coding sequences into the mTert locus in mouse embryonic stem cells (mESCs). The hmTert gene, encoding the wildtype mTert protein, was fully functional, as a mESC line with homozygous hmTert alleles proliferated for over 400 population doublings without exhibiting chromosomal abnormalities. Like human ESCs, the engineered mESCs contained high telomerase activity, which was repressed upon their differentiation into fibroblast-like cells in a histone deacetylase-dependent manner. Fibroblast-like cells differentiated from these mESCs contained little telomerase activity. Thus, telomerase in mESCs with the hmTert alleles was subjected to human-like regulation. Our study revealed a novel approach to engineer a humanized telomerase gene in mice, achieving a milestone in creating a mouse model with humanized telomere homeostasis.