Gene expression of human papillomavirus type 16 (HPV-16) and other HPV types is epithelial specific. Specificity is brought about by synergism between several different transcription factors that seem to occur ubiquitously but differ qualitatively and quantitatively between cells in which HPV genomes are transcriptionally active or inactive. Here, we report on the contribution to this combinatorial mechanism by the activator Sp1 and the related antagonist Sp3, both of which can bind a single site at the E6 promoter of all genital HPVs. In the Sp-factor-free background of Drosophila cells, Sp1 activates HPV-16 transcription, while Sp3 fails to do so and even inhibits the activation by Sp1. The same differential activation occurs in the case of promoters of the epithelial-specific cellular genes encoding keratin 18 and E-cadherin. All cell types that we examined contain similar amounts of Sp3 factor. In contrast, Sp1 levels, determined by supershifts and Western blots, are higher in several human epithelial cell lines that support HPV transcription than in human fibroblasts, liver, and muscle cells. This suggests that cell-type differential transcription is regulated by Sp1 and Sp3. In primary keratinocytes, Sp3 levels exceed those of Sp1. This ratio became inverted after differentiating these cells in high calcium, or methyl cellulose containing medium. The simultaneous transcriptional stimulation of the HPV promoter points to a role of the Sp1-Sp3 antagonism during a differentiation of stratified epithelia in vivo, as these culture techniques mimick this process in vitro. Transformation in vivo or in vitro seems to override these cell-type-specific controls and leads to a general increase of Sp1 activity.