Human papillomaviruses (HPVs) reproduce only in differentiated squamous epithelia. Viral transcription is rather restricted in basal strata but increases dramatically in the spinous cells. Inopportune viral oncoprotein expression in the basal reserve cells can lead to dysplasias and carcinomas. Until now all studies to identify transcription factor binding sites within the upstream regulatory region (URR) that controls the expression of the oncogene have been conducted in proliferating cell cultures. We report the establishment of a reproducible and convenient system to examine cis elements important for differentiation-dependent transcriptional regulation. The bacterial lacZ gene under the control of the HPV URR-E6 promoter was transduced into primary human keratinocytes from neonatal foreskin by using high titer recombinant retroviruses. Acutely infected PHKs were then grown into stratified and differentiated epithelium on collagen rafts. lacZ expression was almost entirely restricted to the spinous cells, indicating that promoter activity was differentiation dependent, as seen in vivo. Using this system, we initiated a mutational analysis of previously identified promoter and enhancer elements within the HPV-18 URR. Three categories of mutations were observed: those that caused severe, moderate, or very small reduction in lacZ expression. The results show both similarities and differences to previously published and present studies in proliferating primary human keratinocytes in monolayer cultures or in immortalized or transformed cell lines. This system is applicable to study both host and viral promoters that require squamous differentiation for their activity.