Productive infections by human papillomaviruses (HPVs) occur only in differentiated keratinocytes in squamous epithelia in which the HPV E7 protein reactivates the host DNA replication machinery to support viral DNA replication. In a fraction of the differentiated keratinocytes, E7 also posttranscriptionally induces p21(cip1), which is distributed in a mutually exclusive manner with unscheduled cellular DNA synthesis. In this study, double immunofluorescence labeling unexpectedly revealed that E7 caused a concordant accumulation of both cyclin E and p21(cip1) to high levels in patient papillomas and in organotypic cultures of primary human keratinocytes. The induction of cyclin E is mutually exclusive with unscheduled cellular DNA synthesis or abundant viral DNA. These novel virus- host interactions in differentiated keratinocytes are in contrast to previous observations made in submerged proliferating cultures, in which HPV E7 induces cyclin E and overcomes p21(cip1) inhibition of S-phase entry. We propose that an appropriately timed induction of cyclin E/cyclin-dependent kinase 2 by HPV E7 in postmitotic cells enables S-phase reentry and HPV DNA amplification, whereas prematurely induced cyclin E stabilizes p21(cip1) protein, which then inhibits cyclin E/ cyclin-dependent kinase 2. Consequently, cyclin E and p21(cip1) both fail to turn over, and DNA synthesis does not occur.