The papillomavirus E1 and E2 proteins are essential for viral genome replication. E1 is a helicase that unwinds the viral origin and recruits host cellular factors to replicate the viral genome. E2 is a transcriptional regulator that helps recruit the E1 helicase to the origin and also plays a role in genome partitioning. We find that when coexpressed, the E1 and E2 proteins from several papillomavirus types localize to defined nuclear foci and result in growth suppression of the host cells. Growth suppression was due primarily to E1 protein function, and nuclear expression of E1 was accompanied by activation of a DNA damage response, resulting in phosphorylation of ATM, Chk2, and H2AX. Growth suppression and ATM activation required the ATPase and origin-specific binding functions of the E1 protein and resulted in active DNA repair, as evidenced by incorporation of nucleotide analogs and detection of free DNA ends. In the presence of the E2 protein, these activities became localized to nuclear foci. We postulate that these foci represent viral replication factories and that a cellular DNA damage response is activated to facilitate replication of viral DNA.