The human papillomavirus type 16 (HPV-16), the type most often associated with cervical cancer, immortalizes primary keratinocytes and inhibits serum/calcium-stimulated differentiation in culture. In this study, we have used a model of keratinocyte immortalization based upon HPV-16 to analyze perturbation of function and expression of E-cadherin, a Ca(2+)-dependent cell-cell adhesion molecule expressed by normal keratinocytes, and its associated proteins. An immortalized keratinocyte cell line generated by cotransfection with HPV-16 E6 and E7 showed decreased membrane E-cadherin expression and redistribution of alpha-, beta-, and gamma-catenin from the undercoat membrane to the cytoplasm. No changes in the level of expression were seen. Selection of the immortalized keratinocyte cell line for resistance to differentiation generated a more transformed cell line with an invasive phenotype, down-regulated E-cadherin and alpha-catenin, and up-regulated the epidermal growth factor receptor (EGFr). Transfection of an E-cadherin expression construct into the differentiation-resistant cell line restored membrane-bound E-cadherin and catenin expression, down-regulated the EGFr, and reversed the invasive phenotype. These results indicate that overexpression of the EGFr correlates with perturbation of the E-cadherin/catenin complex seen in the HPV-16 E6- and E7-transfected keratinocytes and may underlie a functional interaction between growth-regulatory factors and adhesion molecules (E-cadherin/catenin).