Telomerase activity is elevated in more than 85% of cancer cells and absent in most of the normal cells and thus represents a potential cancer biomarker. We report its measurement in colon and bladder cancer cells captured using antibody-coated magnetic beads. The cells are lysed and telomerase activity is detected using a biosensor assay that employs an oligonucleotide containing the telomerase recognition sequence also covalently coupled to magnetic beads. Telomerase activity is measured by the incorporation of multiple biotinylated nucleotides at the 3'-end of the oligonucleotide strands during elongation which are then reacted with streptavidin-conjugated horseradish peroxidase. A luminescent signal is generated when hydrogen peroxidase is added in the presence of luminol and a signal enhancer. LOD experiments confirm sensitivity down to ten cancer cell equivalents. The telomerase assay reliably identified patient samples considered by an independent pathological review to contain cancer cells. Samples from normal healthy volunteers were all telomerase negative. The assay, which is amenable to automation, demonstrated high sensitivity and specificity in a small clinical cohort, making it of potential benefit as a first line assay for detection and monitoring of colon and bladder cancer.