Expression of the HPV E2 open reading frame in cervical cancer cells has been shown to affect the expression of both viral and cellular genes. We have examined the phenotypic effects of the expression of human papillomavirus 16 E2 open reading frame in the human keratinocyte cell line HaCaT. Increased levels of apoptotic cell death were seen within 24h of the transfection of HPV-16 E2 expression constructs. However, in those cells which survived selection and retained the intact E2 ORF, long-term stable expression of E2, as detected by RT-PCR, produced cells which developed phenotypes typical of terminally differentiated cells. These included characteristic morphological changes and expression of involucrin, filaggrin and senescence markers. This provides the first evidence of a role for E2 in stimulation of the normal epithelial differentiation programme, which would promote the progression of the HPV life cycle.