Human Papillomavirus (HPV) 16 E7 protein promotes the transformation of HPV infected epithelium to malignancy. Here, we use a murine model in which the E7 protein of HPV16 is expressed as a transgene in epithelium to show that mast cells are recruited to the basal layer of E7-expressing epithelium, and that this recruitment is dependent on the epithelial hyperproliferation induced by E7 by inactivating Rb dependent cell cycle regulation. E7 induced epithelial hyperplasia is associated with increased epidermal secretion of CCL2 and CCL5 chemokines, which attract mast cells to the skin. Mast cells in E7 transgenic skin, in contrast to those in non-transgenic skin, exhibit degranulation. Notably, we found that resident mast cells in E7 transgenic skin cause local immune suppression as evidenced by tolerance of E7 transgenic skin grafts when mast cells are present compared to the rejection of mast cell-deficient E7 grafts in otherwise competent hosts. Thus, our findings suggest that mast cells, recruited towards CCL2 and CCL5 expressed by epithelium induced to proliferate by E7, may contribute to an immunosuppressive environment that enables the persistence of HPV E7 protein induced pre-cancerous lesions.