Using a recently described keratinocyte assay, we demonstrate that HPV-18 DNA induces two progressive steps in cellular transformation (a large cell and a small cell stage). Both steps of this keratinocyte transformation can be achieved with a subgenomic fragment containing only the HPV-18 regulatory region and E6/E7 genes. Similar to cell lines transformed by the complete HPV-18 genome, keratinocytes transformed by the HPV-18 E6/E7 genes express the major early viral protein (E7) but are non-tumorigenic in nude mice. Interestingly, HPV-18 DNA was noted to be 5 times more efficient than HPV-16 DNA for in vitro keratinocyte transformation, regardless of the method of DNA transfection.