Mutations in the genes encoding telomerase reverse transcriptase (TERT) and telomerase's RNA components as well as shortened telomeres are risk factors for idiopathic pulmonary fibrosis, where repetitive injury to the alveolar epithelium is considered a key factor in pathogenesis. Given the importance of TERT in stem cells, we hypothesized that TERT plays an important role in epithelial repair and that its deficiency results in exacerbation of fibrosis by impairing this repair/regenerative process. To evaluate the role of TERT in epithelial cells, we generated type II alveolar epithelial cell (AECII)-specific TERT conditional knockout (SPC-Tert cKO) mice by crossing floxed Tert mice with inducible SPC-driven Cre mice. SPC-Tert cKO mice did not develop pulmonary fibrosis spontaneously up to 9 months of TERT deficiency. However, upon bleomycin treatment, they exhibited enhanced lung injury, inflammation, and fibrosis compared with control mice, accompanied by increased pro-fibrogenic cytokine expression but without a significant effect on AECII telomere length. Moreover, selective TERT deficiency in AECII diminished their proliferation and induced cellular senescence. These findings suggest that AECII-specific TERT deficiency enhances pulmonary fibrosis by heightening susceptibility to bleomycin-induced epithelial injury and diminishing epithelial regenerative capacity because of increased cellular senescence. We confirmed evidence for increased AECII senescence in idiopathic pulmonary fibrosis lungs, suggesting potential clinical relevance of the findings from our animal model. Our results suggest that TERT has a protective role in AECII, unlike its pro-fibrotic activity, observed previously in fibroblasts, indicating that TERT's role in pulmonary fibrosis is cell type-specific.