Extension of telomeres is a critical step in the immortalization of cancer cells. This complex reaction requires proper spatio-temporal coordination of telomerase and telomeres, and remains poorly understood at the cellular level. To understand how cancer cells execute this process, we combined CRISPR genome editing and MS2 RNA-tagging to image single-molecules of telomerase RNA (hTR). Real-time dynamics and photoactivation experiments of hTR in Cajal bodies (CBs) reveal that hTERT controls the exit of hTR from CBs. Single-molecule tracking of hTR at telomeres shows that TPP1-mediated recruitment results in short telomere-telomerase scanning interactions, then base-pairing between hTR and telomere ssDNA promotes long interactions required for stable telomerase retention. Interestingly, POT1 OB-fold mutations that result in abnormally long telomeres in cancers act by enhancing this retention step. In summary, single-molecule imaging unveils the life-cycle of telomerase RNA and provides a framework to understand how cancer-associated mutations mechanistically drive defects in telomere homeostasis.