The E2 gene products of papillomavirus play key roles in viral replication, both as regulators of viral transcription and as auxiliary factors that act with E1 in viral DNA replication. We have carried out a detailed structure-function analysis of conserved amino acids within the N-terminal domain of the human papillomavirus type 16 (HPV16) E2 protein. These mutants were tested for their transcriptional activation activities as well as transient DNA replication and E1 binding activities. Analysis of the stably expressed mutants revealed that the transcriptional activation and replication activities of HPV16 E2 could be dissociated. The 173A mutant was defective for the transcriptional activation function but retained wild-type DNA replication activity, whereas the E39A mutant wild-type transcriptional activation function but was defective in transient DNA replication assays. The E39A mutant was also defective for HPV16 E1 binding in vitro, suggesting that the ability of E2 protein to form a complex with E1 appears to be essential for its function as an auxiliary replication factor.