Epidermal keratinocytes and hair follicle (HF) stem cells (SCs) expressing oncogenes are competent at developing squamous cell carcinomas (SCCs) in epidermis and HFs, respectively. To determine whether bulge and hair germ (HG) SCs from HF contribute to SCC generation at distant epidermis, the most frequent epidermal region where these lesions arise in human skin, we used a skin cancer mouse model expressing E6 and E7 oncoproteins from Human papillomavirus (HPV) 16 in SCs and basal keratinocytes. This previously described mouse model recapitulates the human skin papillomavirus-induced SCC pathology. We show that E6 and E7 expression promote the expansion of keratin 15 (K15)-expressing cells. These K15(+) aberrant cells exhibit some HGSC markers and diminished expression of Tcf3 and Sox9 hair SC specification genes, which are accumulated in HFs and mislocalized to interfollicular epidermis. Leucine-rich G-protein-coupled receptor 5 (Lgr5)-expressing SCs, localized in the bulge and HG, are the origin of the expanded K15(+) cell population. A large subset of the Lgr5(+) SC progeny, expressing K15 and P-cadherin, is aberrantly mobilized to the upper region of HFs and the epidermis, and accumulates at E6/E7-induced pre-neoplastic lesions and epidermal tumors. These findings indicate that aberrant accumulation of altered SCs in HFs and their subsequent migration to the epidermis contribute to HPV-induced tumor development.