Papillomaviruses are small DNA viruses which establish persistent infection in the epithelial tissue of various animal species. Three papillomavirus proteins encoded by the bovine papillomavirus type 1 E2 open reading frame have a common C-terminal DNA binding and dimerization domain and function as dimeric proteins in the regulation of viral gene expression, genome replication, and maintenance. The full-length E2 protein, expressed usually at the lowest level of the three, is an activator, while shorter forms of E2, lacking the transactivation domain, serve as repressors of replication and transcription. In virally infected cells, the full-length E2 protein forms heterodimers with repressor forms of the E2 protein and the biological activities of such heterodimers are poorly known. In order to study the functionality of E2 heterodimers, we joined the full-length E2 protein and E2 repressor by a flexible polypeptide hinge so that they formed a single-chain intramolecular dimer. The single-chain E2 heterodimers folded correctly to form genuine pseudodimers capable of binding to the specific E2 protein binding site with high affinity. Characterization of the activities of this protein in transcription showed that it functions as an effective transcriptional activator, which is comparable to what was found for the full-length E2 protein. The single-chain heterodimer is dependent to some extent on Brd4 protein and is able to support papillomavirus origin replication; however, it does not support the partitioning of the multimeric E2 binding site containing plasmids in dividing cells. Our results suggest that E2 heterodimers serve as activators of transcription and replication during the viral life cycle.