We had previously observed that HPV-16 E7 disturbs the Guanylate Binding Protein (GBP)-ISRE reporter activation by IFN-gamma thus suggesting an alteration of the IRF-1 function. In this study we examined the mechanism by which E7 affects the IFN-gamma signals driving the activation of gene transcription. Using 14/2 BRK cells containing dexamethasone-inducible HPV-16 E7 gene, we observed a large inhibition of the IRF-1 DNA binding activity upon E7 induction. Concomitantly, there was no significant change in the levels of IRF-1, indicating that this was not due to reduced levels of IRF-1 expression. Likewise, in vitro translated E7 did not affect the IRF-1 DNA binding activity in nuclear extracts derived from IFN-induced cells, thus indicating that the effects of E7 are upstream of IRF-1's binding to its DNA recognition site. Finally, NFkappaB DNA binding activity was also inhibited under conditional expression of E7. These data indicate that HPV-16 E7 inhibits the IRF-1 and NFkappaB function and this could lead to the impairment of the IFN response in HPV-infected cells. Furthermore, the findings suggest that different events of the IFN inducible signal cascade seem to be target for HPV-16 E7.