The E2 open reading frame of bovine papillomavirus type 1 (BPV-1) encodes at least three proteins with transcriptional regulatory properties. The full-length E2 open reading frame encodes a transcriptional transactivator, and the 3' region encodes two smaller polypeptides that repress E2-mediated transactivation. The full-length gene product is also required for viral DNA replication. We have demonstrated that the BPV-1 E2 polypeptides are phosphorylated primarily on two serine residues at a site adjacent to the carboxy-terminal DNA binding domain, which is common to all three E2 proteins (A. A. McBride, J. B. Bolen, and P. M. Howley, J. Virol. 63:5076-5085, 1989). These serine residues, at amino acid positions 298 and 301, were substituted with alanine residues in the context of the entire BPV-1 genome. The mutated BPV-1 genomes were introduced into rodent cell lines and assayed for focus formation, viral gene expression, and extrachromosomal viral DNA replication. Viral DNAs containing the E2 serine-to-alanine substitution mutants transformed C127 cells with efficiencies comparable to that of wild-type BPV-1. However, the viral genome containing the serine-to-alanine substitution at position 301 of the E2 polypeptide replicated to a copy number 20-fold higher than that of wild-type DNA.