Nasopharyngeal carcinoma (NPC) is a common disease in Hong Kong and southern provinces of China. EBV infection is believed to play a critical role in the development of NPC. Previous studies on the transformation mechanism of EBV genes were mostly performed in either NPC or nonnasopharyngeal epithelial cells which may not be representative of premalignant nasopharyngeal epithelial cells. Establishment of a representative cell system would greatly facilitate the elucidation of the role of EBV infection in the development of NPC. Using telomerase alone, we were able to establish an immortalized nasopharyngeal epithelial cell line from primary nonmalignant nasopharyngeal biopsies. The telomerase‐immortalized nasopharyngeal epithelial cells are largely diploid in karyotype. Interestingly, this newly immortalized nasopharyngeal epithelial cell line, referred as NP460hTert, harbors genetic alterations previously identified in premalignant and malignant nasopharyngeal epithelial cells. These include inactivation of p16 by homozygous deletion of the p16INK4A locus and downregulation of RASSF1A expression. The deletion of the p16INK4A locus appears to be the most crucial event for the immortalization of nasopharyngeal epithelial cells by telomerase and precedes RASSF1A downregulation. In addition, detailed analysis of the cytogenetic changes by conventional cytogenetics, spectral karyotyping (SKY) and array‐based CGH revealed a gain of a 17q21‐q25 fragment on 11p15 chromosome in all NP460hTert cells which occurred before deletion of the p16INK4A locus. Gain of 17q has been previously reported in NPC. In addition, activation of NF‐κB was observed in immortalized NP460hTert cells at the later population doublings, and may play a role in the survival of immortalized NP epithelial cells. Id1 which is commonly expressed in various human cancers, including NPC, was also upregulated in the immortalized NP460hTert cells. Thus, the establishment of an immortalized nasopharyngeal epithelial cell line harboring common genetic alterations present in premalignant and cancerous nasopharyngeal epithelial cells may provide a valuable cell system to examine for early events involved in NPC carcinogenesis, particularly in elucidating the role of EBV infection in NPC development. © 2006 Wiley‐Liss, Inc.