An intracellular cascade amplification strategy for ultrasensitive “off-on” imaging of telomerase activity in living cells was designed. The method was based on fabrication of a dual function module-encapsulated liposome nanoprobe, which consisted of a telomerase-targeting responder-transmitter DNA complex (HPT) module and a catalyzed hairpin assembly (CHA) signal amplification module. Upon transfected into living cells, the released HPT could be specifically recognized and extended by telomerase, leading to the release of the transmitter DNA. The transmitter could act as the initiator and catalyzer of CHA amplification, resulting in the lightening up of the reporter complex. The telomerase activity could be monitored in situ by the fluorescence signal without the need for obtaining cell extracts. Because of the recycling use of the transmitter, multiplied enhancement of signal outputs from one extension event was achieved. The proposed strategy could be employed for in situ monitoring of the change of intracellular telomerase activity in response to drugs to detect drug efficacy. Thus the method has great potential in the study of the molecular mechanisms of telomerase-related life processes.