Telomerase is a key participant of telomere length maintenance system in majority of eukaryotes. It synthesizes telomere repeats at 3'-end of telomere DNA according to its own RNA template. In addition to the reverse transcriptase subunit Est2p and telomerase RNA TLC1, yeast telomerase contain Est1p, necessary for telomerase attachment to telomere and telomerase activation, and Est3p, a subunit with unknown function. We have isolated Est3p and examined its biochemical properties. Est3p binds both DNA and RNA oligonucleotides containing telomere repeat sequences and stimulates dissociation of RNA/DNA heteroduplexes. The importance of these properties of Est3p for telomerase function is discussed.