The results of experiments aimed at determining whether cytotoxic T lymphocytes (CTLs) can kill keratinocytes (KCs) expressing endogenously loaded antigen indicated that antigen specific cytotoxic T lymphocytes could recognize and kill keratinocytes expressing ovalbumin (OVA) or SIINFEKL peptide. Exposure of the KCs to interferon-gamma (IFN-γ) enhanced this CTL-mediated KC lysis and increased CTL epitope presentation on the surface of target cells. Expression of HPV 16 E7 protein in KCs affected CTL-mediated lysis. Expression of HPV 16 E7 inhibited IFN-γ-mediated up-regulation of SIINFEKL/H-2Kb complexes on keratinocytes, and also inhibited IFN-γ-mediated up-regulation of IRF-1 expression, and consequent up-regulation of TAP1 transcription. Further, overexpression of IRF-1 partially corrected the HPV 16 E7-mediated inhibition of enhanced susceptibility of KC lysis induced by IFN-γ. Thus, the effects of HPV 16 E7 on CTL-mediated lysis of IFN-γ exposed KCs are likely mediated by inhibition of MHC class I antigen presentation by IFN-γ. These findings may help explain why HPV-infected epithelial cells can escape from immune surveillance mediated by CTLs in vivo and in vitro.