The RNA subunit of telomerase is an essential component whose primary sequence and length are poorly conserved among eukaryotic organisms. The phytopathogen Ustilago maydis is a dimorphic fungus of the order Ustilaginales. We analyzed several species of Ustilaginales to computationally identify the TElomere RNA (TER) gene ter1. To confirm the identity of the TER gene, we disrupted the gene and characterized telomerase-negative mutants. Similar to catalytic TERT mutants, ter1Δ mutants exhibit phenotypes of growth delay, telomere shortening and low replicative potential. ter1-disrupted mutants were unable to infect maize seedlings in heterozygous crosses and showed defects such as cell cycle arrest and segregation failure. We concluded that ter1, which encodes the TER subunit of the telomerase of U. maydis, have similar and perhaps more extensive functions than trt1.