E2F and DP family members are established regulators of the cell cycle. In this study, we examined their activity/expression during keratinocyte growth arrest. Treating human epidermal keratinocytes with the growth inhibitors TPA or IFN-gamma or allowing the cells to reach confluence resulted in 90% inhibition of DNA synthesis, whereas a keratinocyte-derived squamous carcinoma cell line (SCC25) was resistant to growth inhibitors. Gel shift analysis of keratinocytes using an E2F response element indicated that growth arrest was associated with a decrease in all E2F binding complexes. This indicates that growth inhibition is not due to negative regulation by pocket proteins. Conversely, gel shift analysis of growth inhibitor-resistant SCC25 cells showed no decrease in E2F binding. If deregulated E2F expression/activity is involved in tumor development, then the deliberate deregulation of E2F activity may make keratinocytes resistant to growth inhibitors in much the same way as the SCC cells. The HPV16 E7 protein is known to activate E2F. Retroviral infection of keratinocytes with E7-expressing constructs resulted in growth inhibitor resistance, whereas infection with E6 constructs did not. E2F is a heterodimeric complex consisting of E2F family members (1-5) and DP proteins (1-3). Examination of the expression levels for E2F genes and other genes associated with the cell cycle indicated that E2F1 was profoundly decreased in growth-arrested keratinocytes (90%), whereas E2F3, E2F5, and DP1 were not. E2F2 and E2F4 were increased in IFN-gamma-treated keratinocytes but not in TPA-treated or confluent keratinocytes. In contrast, SCC25 cells did not undergo growth arrest and did not downregulate E2F1 mRNA expression in response to growth inhibitors. Our results indicate that E2F DNA binding and in particular E2F1 mRNA expression are associated with keratinocyte proliferation. Our results with the SCC25 cells and the E7-infected cells are consistent with the proposition that deregulated E2F expression/activity (in particular E2F1) may be involved in the unregulated proliferation of skin tumor cells.