Reproducible multi-stage progression to invasive squamous carcinoma of the epidermis has been achieved in transgenic mice expressing the HPV16 early-region genes, including the E6/E7 oncogenes, under the control of the human keratin-14 promoter/enhancer. Although 100% of K14-HPV16 transgenic animals develop hyperplastic and/or dysplastic lesions in several inbred backgrounds, including C57BL/6, BALB/c, and SSIN/SENCAR, only mice backcrossed into the FVB/n background progress to malignant squamous cell carcinomas of two pathological grades, well differentiated and moderate/poorly differentiated (WDSC or MPDSC, respectively), each displaying characteristic patterns of malignant behavior. WDSCs typically arise within the epidermis of the ear and invade deeply into the underlying dermis but fail to metastasize, whereas MPDSCs develop on the chest and truncal skin and invariably metastasize to regional lymph nodes. The transition to the malignant state, in 21% of FVB/n transgenic mice, is characterized by alteration of the repertoire of keratin intermediate filament proteins expressed within neoplastic epidermis, such that WDSCs maintain expression of keratins common to terminally differentiating stratified keratinocytes (K10), whereas MPDSCs are distinguished from WDSCs by activation of embryonic and mucosal keratins (K13, K8, and K19). Precursor hyperplastic and dysplastic lesions are characterized by a progressively increased proliferative index, striking morphological alterations in keratinocyte cell-cell and cell-matrix interactions, and extensive remodeling of the underlying dermal stroma. Remarkably, this extensive stromal remodeling, which may facilitate both angiogenesis and eventual tumor cell invasion, develops early at the dysplastic stage in all animals well before malignant conversion.