The human papillomavirus (HPV) transforming genes E6 and E7 are retained and expressed in the majority of cervical cancers implying an important role for these proteins in maintenance of the malignant phenotype. Leukoregulin (LR) and recombinant gamma-interferon (r-IFN-gamma), lymphokines secreted by immune cells present in regressing HPV infections, inhibited transcription of E6/E7 RNAs in several human cervical epithelial cell lines immortalized by recombinant HPV-16, -18, and -33 DNAs. r-IFN alpha was not effective. Reduction in E6/E7 RNA expression was accompanied by inhibition of cell proliferation coincident with an increase in epidermal transglutaminase activity, a marker of squamous differentiation. LR and r-IFN gamma enhanced transcription of class 1 cell surface histocompatibility antigens (HLA) and r-IFN gamma additionally induced HLA class 2 expression. HPV-immortalized cells developed partial resistance to the growth inhibitory effects of lymphokines after malignant transformation or extended propagation in culture. This is the first demonstration that LR and r-IFN gamma selectively inhibit transcription of HPV-transforming genes and suggests a molecular mechanism by which these lymphokines participate in regression of premalignant cells.