This study aimed at resolving cellular genetic alterations in the process of in vitro immortalization of human keratinocytes by human papillomavirus (HPV) types 16 and 18. Four cell lines of primary human foreskin keratinocytes transfected with HPV 16 and HPV 18, respectively, were analysed during the transition from the mortal to immortal state. All cell lines showed strong telomerase activity at the immortal state, whereas no or only weak telomerase activity was detected in mortal precursor cells. This was consistent with telomere stabilization or restoration only observed in immortal cells, HPV physical state and copy number appeared constant during immortalization and HPV E6/E7 transcripts were present throughout. Immortalization was associated with clonal allele losses at 3p combined with either 11q or 18q or at 10p, dependent on the cell line. Moreover, a correlation was evident between the onset of telomerase activity and allele loss at 3p or 10p. All immortalized cells retained the capability to differentiate after growth in the presence of physiological calcium and serum. Moreover, one of the immortal cell lines displayed terminal differentiation after organotypic culturing on collagen rafts. The data suggest that (a) several pathways exist for HPV mediated immortalization that may involve genes residing at 3p, 10p, 11q and/or 18q; (b) 3p and 10p may encode genes involved in telomerase regulation; and (c) immortalization in vitro can be correlated with a spectrum of morphological changes varying from mild to severe dysplasia.