Expression of hTERT is the major limiting factor for telomerase activity. We previously showed that methylation of the hTERT promoter is necessary for its transcription and that CTCF can repress hTERT transcription by binding to the first exon. In this study, we used electrophoretic mobility shift assay (EMSA) and chromatin immunoprecipitation (ChIP) to show that CTCF does not bind the methylated first exon of hTERT. Treatment of telomerase-positive cells with 5-azadC led to a strong demethylation of hTERT 5′-regulatory region, reactivation of CTCF binding and downregulation of hTERT. Although complete hTERT promoter methylation was associated with full transcriptional repression, detailed mapping showed that, in telomerase-positive cells, not all the CpG sites were methylated, especially in the promoter region. Using a methylation cassette assay, selective demethylation of 110 bp within the core promoter significantly increased hTERT transcriptional activity. This study underlines the dual role of DNA methylation in hTERT transcriptional regulation. In our model, hTERT methylation prevents binding of the CTCF repressor, but partial hypomethylation of the core promoter is necessary for hTERT expression.