The transcriptional promoter of the candidate E6‐E7 transforming gene region of human papillomavirus (HPV)‐16 (P97) was active in transiently transfected cervical carcinoma cells when linked to the HSV‐1 tk or bacterial cat genes. Sequences 5′ to P97 contain a short enhancer element responding to cellular factor(s) in uninfected human foreskin keratinocytes and in cervical carcinoma cells, but not in human or animal fibroblasts. The E2 trans‐activator products of HPV‐16 or of the related bovine papillomavirus (BPV)‐1 further elevated HPV‐16‐driven transcripts in co‐transfections, and required the presence of E2‐binding ACC(N)6GGT cores in cis. A ‘short E2’ C‐terminal repressor gene product (sE2) of HPV‐16 or the BPV‐1 sE2 repressor not only inhibited viral E2 trans‐activation, but also suppressed enhancer response to keratinocytic factors. Suppression by the sE2 products was abolished by deletion of the E2‐binding cores in cis or by a mutation in the sE2 DNA binding domain. The keratinocyte‐dependent enhancer is likely to contribute to the epithelial cell tropism of HPV‐16, and may direct persistent E6‐E7 gene transcription in response to cellular factors in cervical carcinoma cells in which the viral E2 genes are inactive.