Organ-transplant-recipients exhibit cancerization of the skin from which multiple human papillomavirus (HPV)-positive squamous cell carcinomas (SCCs) arise. However, the molecular basis for HPV-induced invasion of skin keratinocytes is not known. We generated a transgenic mouse model expressing the E7 oncoprotein of HPV8 in the murine epidermis under the control of the keratin-14 promoter and showed that E7 is carcinogenic in mice. We further showed that both, the E7-expressing keratinocyte and mesenchymal components of the extracellular matrix as critical in eliciting the invasive behavior. E7 expression in basal keratinocytes, grown on fibronectin, led to epithelial-mesenchymal transition mediated by a cadherin switch. E7-positive keratinocytes displayed enhanced EDA-fibronectin expression and secretion and stimulated dermal fibroblasts to express EDA-fibronectin. Deposition of fibronectin was also detected in the peritumoral stroma of HPV8-positive skin SCC. When grown on fibronectin, E7-positive keratinocytes, in particular stem cell-like cells, exhibited increased cell surface levels of the α3-integrin chain. Functional blocking confirmed α3 as a critical molecule sufficient to induce E7-mediated invasion. This mechanistic link is further supported by expression of an E7-mutant, impaired in targeting α3 to the cell surface. These findings highlight the importance of epithelial-extracellular matrix interaction required for keratinocyte invasion and provide further mechanistic evidence for a role of HPV in skin carcinogenesis.