Human papillomaviruses (HPV) have been implicated in the development of nonmelanoma skin cancer (NMSC). The molecular mechanisms by which these viruses contribute towards NMSC are poorly understood. We have used an in vitro skin-equivalent model generated by transducing primary adult human epidermal keratinocytes with retroviruses expressing HPV genes to investigate the mechanisms of viral transformation. In this model, keratinocytes expressing HPV genes are seeded onto a mesenchyme composed of deepidermalized human dermis that had been repopulated with primary dermal fibroblasts. Expression of the HPV8 E7 gene caused both an enhancement of terminal differentiation and hyperproliferation, but most strikingly, the acquisition of the ability to migrate and invade through the underlying dermis. The basement membrane integrity was disrupted in a time-dependent manner in areas of invading keratinocytes, as evidenced by immunostaining of its protein components collagen types VII, IV, and laminin 5. This was accompanied by the overexpression of extracellular matrix metalloproteinases MMP-1, MMP-8, and MT-1-MMP. These results suggest that the cutaneous HPV type 8 that is frequently found in NMSC of epidermodysplasia verruciformis patients may actively promote an invasive keratinocyte phenotype. These findings also highlight the importance of epithelial-extracellular matrix-mesenchymal interactions that are required to support cell invasion.