Telomerase activation is a key step in the development of human cancers. Interferon-${eta}$ (IFN-${eta}$) signaling induces growth arrest in many tumors but the anticancer mechanism of IFN-${eta}$ is poorly understood. In the present study, we show that IFN-${eta}$ signaling represses telomerase activity and human telomerase reverse transcriptase (hTERT) transcription in ovarian cancer and suggest that this signaling is mediated by $p21^{WAF1}$. IFN-${eta}$ triggered down-regulation of telomerase activity and hTERT mRNA expression and also induced p21 expression, independently of p53 induction. Ectopic expression of p21 attenuated hTERT promoter activity. Murine embryonic fibroblasts (MEFs) genetically deficient in p21 (p21-/-) showed elevated (> 15 times) hTERT promoter activity compared to wild-type MEFs. Overexpression of p21 reduced the hTERT promoter activity of p21-/- MEFs and hTERT mRNA expression in HCT116 $p21^{WAF1}$ cell. These findings provide evidence that p21 is a potential mediator of IFN-${eta}$-induced attenuation of telomerase activity and tumor suppression.