Human papillomaviruses are the causative agents of cervical cancer. Previous studies have shown that loss of the viral E2 protein during malignant progression is an important feature of HPV-induced malignancy due to the resulting uncontrolled expression of the viral oncoproteins E6 and E7. We now show however that the viral E2 and E6 proteins are both capable of regulating each other's activity. When coexpressed, E2 and E6 induce marked changes in the pattern of each other's expression, with preferential accumulation in nuclear speckles. The two proteins interact directly, resulting in changes in the substrate specificities of E6 and the biochemical activities of E2. Thus, while E6 efficiently degrades its PDZ domain-containing substrates in the absence of E2, this activity is greatly diminished when E2 is present. Likewise, E2 alone drives both viral DNA replication and viral gene expression. However, in the presence of E6, viral DNA replication is inhibited while the transcriptional activity of E2 is elevated. These studies define a far more complex pattern of interaction between E2 and E6 than was previously thought and redefines the possible consequences of loss of E2 with respect to uncontrolled E6 activity and consequent malignant progression.