Bovine papillomavirus type 1 (BPV-1) was expressed in established mouse BALB/MK epidermal keratinocytes. In each of the transfected cell lines, DNA synthesis was stimulated by epidermal growth factor (EGF) and inhibited by type beta transforming growth factor to an extent similar to that in parental cells. In contrast, the BPV-1-transfectants were resistant to the induction of terminal differentiation by extracellular Ca(+)+. First, BPV transfectants continued to respond to EGF in the presence of Ca(+)+, whereas the growth of BALB/MK cells was arrested. The characteristics of EGF-binding were identical in the two cell lines. Second, the Ca+(+)-switch failed to induce the activation of epidermal transglutaminase in BPV-1-transfectants. Thus, BPV-1 caused mouse keratinocytes to become resistant to Ca+(+)-induced differentiation without otherwise affecting the control of cell growth.