Current mouse models of lung cancer recapitulate signature genetic lesions and some phenotypic features of human lung cancer. However, because mice have long telomeres, models to date do not recapitulate the aspects of lung carcinogenesis-telomere attrition and the genomic instability that ensues-believed to serve as key mechanisms driving lung tumor initiation and progression. To explore the contributions of telomere dysfunction to lung cancer progression, we combined a telomerase catalytic subunit (mTerc) mutation with the well-characterized K-rasG12D mouse lung cancer model. K-ras(G12D) mTerc(-/-) mice with telomere dysfunction but intact p53 exhibited increased lung epithelial apoptosis, delayed tumor formation and increased life span relative to K-ras(G12D) mTerc(+/-) mice with intact telomere function. This demonstrates that by itself, telomere dysfunction acts in a tumor-suppressive mechanism. Introduction of a heterozygous p53 mutation exerted a marked histopathological, biological and genomic impact. K-ras(G12D) mTerc(-/-) p53(+/-) mice developed aggressive tumors with more chromosomal instabilities and high metastatic potential, leading to decreased overall survival. Thus, we have generated a murine model that more faithfully recapitulates key aspects of the human disease. Furthermore, these findings clearly demonstrate (in an in vivo model system) the dual nature of telomere shortening as both a tumor-suppressive and tumor-promoting mechanism in lung cancer, dependent on p53 status.