Twitter founder Biz Stone, writing about the changes on Twitter's official blog, said: "In the terms we leave the door open for advertising. We'd like to keep our options open ."
The new state the service can include advertisements on the site which can be targeted according to information either submitted by the user or others.
The move follows Stone's comments at the Reuters Technology Summit in May where he said the microblogging site would seek revenue through corporate accounts.
At the event Stone said: "There are a few reasons why we're not pursuing advertising -- one is, it's just not quite as interesting to us."
He also said advertising could be obtrusive to users and it could take some time to recruit an advertising sales team.
Other changes to Twitter's T&Cs include clarifying the user owns their own content. Stone also said it is working on new guidelines for the use of applications on the site.