Telomere elongation by telomerase consists of two types of translocation: duplex translocation during each repeat synthesis and template translocation at the end of repeat synthesis. Our replica exchange molecular dynamics simulations show that in addition to the Watson–Crick interactions in the active site, templating RNA can also form base pairs with the upstream regions of DNA, mostly with the second upstream DNA repeat with respect to the 3’-end. At the end of the repeat synthesis, dG10-P442 and dG11-N446 hydrogen bonds form. Then, active-site base pairs dissociate one by one, and the RNA bases reanneal with the complementary base on the upstream DNA repeat. For each dissociating base pair a new one forms, thus conserving the number of base pairs during template translocation.