Tissue-restricted POU domain transcription factors, which bind octamer or octamer-like gene sequences, play roles in cellular differentiation and the development of several organs, We have previously identified a POU domain gene, Skn-1a/i, expressed primarily in epidermis, that encodes at least two products through alternative splicing. One of these, Skn-1a, acts as a transcriptional activator, and the other, Skn-1i, contains an inhibitory domain in the NH2 terminus, which prevents DNA-binding in vitro and transcriptional activation in vivo. We now demonstrate that when Skn-1i is expressed in eukaryotic cells it can bind to an octamer site, suggesting that in vivo cellular factors modulate the activity of the inhibitory domain to permit DNA-binding. Yet the inhibitory domain does not allow transactivation by Skn-1i or by a heterologous transactivator containing this domain in cis. Furthermore, we demonstrate that Skn-1a, Tst-1, and Oct-1 are the major octamer binding proteins in epidermis. Since Skn-1a is primarily expressed in suprabasal cells of the epidermis, we have tested its possible role in the regulation of epidermal papillomaviruses. In transient transfection assays, Skn-1a and Tst-1 can activate the long control region of the epidermis-specific human papillomavirus 1A (HPV-1A), Consistent with these in vivo transcription data, in. vitro DNA binding studies identify three octamer-like sites, which are capable of binding Skn-1a, in the HPV-1A long control region, Mutations of all three octamer-like sites prevent transactivation by Skn-1a in transient transfection assays. Taken together, these re suits provide evidence that Skn-1a and Tst-1 may provide a molecular link between HPV gene expression and epidermal differentiation.