"High-risk" human papillomaviruses (HPV) infect keratinocytes of squamous epithelia. The HPV16E7 protein induces epithelial hyperplasia by binding Rb family proteins and disrupting cell cycle termination. Murine skin expressing HPV16E7 as a transgene from a keratin 14 promoter (K14.E7) demonstrates epithelial hyperplasia, dysfunctional antigen presenting cells, ineffective antigen presentation by keratinocytes, and production of immunoregulatory cytokines. Furthermore, grafted K14.E7 skin is not rejected from immunocompetent non-transgenic recipient animals. To establish the contributions of E7, of E7-Rb interaction and of epithelial hyperplasia to altered local skin immunity, K14.E7 skin was compared with skin from K14.E7 mice heterozygous for a mutant Rb unable to bind E7 (K14.E7xRbΔL/ΔL mice), that have normoplastic epithelium. Previously, we demonstrated that E7-speicfic T cells do not accumulate in K14.E7xRbΔL/ΔL skin grafts. Here, we further show that K14.E7xRbΔL/ΔL skin, like K14.E7 skin, is not rejected by immunocompetent non-transgenic animals. There were fewer CD11b+ antigen presenting cells in skin draining lymph nodes from animals recipient of K14.E7xRbΔL/ΔL grafts, when compared with animals receiving K14.E7 grafts or K5mOVA grafts. Maturation of migratory DCs derived from K14.E7xRbΔL/ΔL grafts found in the draining lymph nodes is significantly lower than that of K14.E7 grafts. Surprisingly, K14.E7xRbΔL/ΔL keratinocytes, unlike K14.E7 keratinocytes, are susceptible to E7 directed CTL-mediated lysis in vitro. We conclude that E7-Rb interaction and its associated epithelial hyperplasia partially contribute to the suppressive local immune responses in area affected by HPV16E7 expression.