To analyse the potential of the E7 oncogene of HPV-16 to activate transcription, we constructed hybrid proteins containing various portions of the HPV-16 E7 protein fused to the DNA binding region of the bacterial LexA repressor. We found that full length HPV-16 E7 is capable to mediate activation of two different reporter genes, which carry LexA binding sites in their promoters. In contrast, E7 from HPV-11, a low-risk type papillomavirus, was unable to activate transcription, when analysed in the same assay. Mutations in the transforming domains of HPV-16 E7 did not affect the ability of the protein to activate transcription, indicating that it represents a novel function of the oncoprotein, which is not sensitive to any known inactivating mutations. Analysis of E7 subdomains revealed that the N-terminal part of HPV-16 E7 retains the capacity to activate transcription. A second trans-activation domain is located in the C-terminal part of E7; however, in the context of the full length E7 protein this activity is blocked by an adjacent domain. These results reveal a second pathway for transcriptional activation by HPV-16 E7, independent of its interaction with pRB-E2F complexes. Using the E7-LexA hybrid proteins, it is shown that E7 can form homodimers and this property involves a zinc finger structure in the C-terminal part of the protein, partially overlapping with the domain that negatively regulates transcriptional activation by E7.