Telomerase, an enzyme essential for the synthesis and maintenance of telomeric DNA and the long-term stability of the genome, is developmentally regulated in plants. Telomerase activity is abundant in reproductive organs but low or undetectable in vegetative organs. Treatment with exogenous auxin, however, overrides this developmental control and induces telomerase in mature leaves. The Arabidopsis thaliana transcription factor TELOMERASE ACTIVATOR1 (TAC1) potentiates some responses to auxin, including the induction of telomerase activity in leaves. Here, we report that BT2, a protein with BTB, TAZ, and calmodulin binding domains, is an essential component of the TAC1-mediated telomerase activation pathway. Steady state concentration of BT2 mRNA increases in response to TAC1 expression, and TAC1 specifically binds the BT2 promoter both in vitro and in yeast one-hybrid assays. Constitutive expression of BT2 induces telomerase activity in leaves, whereas a null mutation of BT2 blocks TAC1-mediated telomerase induction, indicating that BT2 acts downstream of TAC1 to regulate telomerase activity in mature vegetative organs.