Background: Despite the advances in diagnosis and treatment of lung cancer, its survival rate has only improved in those with early stages of disease. Telomerase is a tumor marker that has been focused on recently as a novel tool for early diagnosis of lung cancer. This study aimed to compare telomerase activity in cases with malignant and benign pleural effusions. Materials and Methods: Telomerase activity was assessed in 28 consecutive cases of pleural effusions (19 cases with malignant and 9 cases with benign histopathologic diagnosis) with telomeric repeat amplification protocol (TRAP) between Apr. 2006 and Sep.2007. Data analysis was performed by using Chi-square test and t-test. Results: Twenty (71.4%) out of 28 cases with pleural effusions were positive for telomerase activity. Telomerase activity was positive in all 19 malignant effusions, while only one case with effusion due to a benign condition (TB) had positive telomerase activity (p <0.0001). The sensitivity, specificity and diagnostic accuracy of telomerase activity for detecting malignant pleural effusions were 100%, 88.9% and 96.4%, respectively. Positive and negative predictive values of telomerase activity were 95% and 100%, respectively. Mean relative telomerase activity was not significantly different in malignant and benign effusions (24.3±5.2% vs. 15.05%; p>0.05) Conclusion: Telomerase activity is a highly sensitive and specific diagnostic biomarker for malignancy and may be used as an adjunct to other diagnostic tools such as cytology for malignant pleural effusions. (Tanaffos 2009; 8(2): 17-23)