HPV16 is a human tumour virus encoding two principal oncoproteins, E6 and E7. Expression of E7 can induce DNA synthesis in quiescent cells and this property coincides with its ability to bind to the cell proteins pRb and p107. As these cell proteins are regulators of the transcription factor E2F, we have investigated whether the interaction with E7 could result in induction of cell cycle regulated genes. We show that B-myb, whose induction at the G1/S boundary is regulated by release from E2F mediated transcriptional repression, is a target for transcriptional activation by E7 and is the first E7 responsive cell gene to be identified. E7 transactivation leads to both inappropriate transcription of B-myb during G1 and constitutive over-expression in cycling cells. B-Myb plays an essential role in cell cycle progression, and activation by E7 is likely to contribute to the mitogenic activity of the viral oncoprotein. Regulation of the B-myb promoter in NIH3T3 cells correlates with binding of distinct p107-containing complexes at the E2F binding site, and analysis of E7 mutants confirms that B-myb transcription in these cells is regulated through interactions with p107 rather than pRb. These results provide the first example of a potentially specific role for p107 in the regulation of the cell cycle.