The human papillomavirus type 16 is associated with anogenital cancer. Transcription of the viral transforming genes E6 and E7 is under the control of an epithelial cell type-specific enhancer. In the enhancer core, we have identified a regulatory element that is recognized by a novel nuclear factor named MSPF (methylation-sensitive papillomavirus transcription factor). Mutating the MSPF binding site strongly affects the enhancer activity. The MSPF recognition sequence 5'-ATGCGNNNNCGCCT-3' contains two CpG dinucleotides, potential targets for 5-cytidine methylation. DNA recognition by MSPF is strictly methylation-sensitive, since introduction of 5-methylcytidine into either CpG abolishes complex formation. Moreover, CpG methylation of the MSPF binding site suppresses the activity of the enhancer and of the MSPF enhanson subfragment in vivo. In the cervical carcinoma cell line CaSki, which has integrated multiple transcriptionally inactive human papilloma virus 16 genomes, a few of the viral genomes are methylated at the MSPF binding site. These findings suggest that viral transcription can be suppressed by methylation of the regulatory region, an event that prevents binding of the cellular transcription factor MSPF.