Here, we used codon usage technology to generate two codon-modified human papillomavirus (HPV)16 E7 genes and, together with wild-type E7, to construct three HPV16 E7 gene plasmids: Wt-E7, HB1-E7, and HB2-E7. The three HPV 16 E7 plasmids were used to investigate how HPV16 E7 protein was expressed in different cells and how this oncoprotein deregulated cellular and molecular events in human keratinocytes to induce carcinogenesis. We discovered that codon usage of HPV16 E7 gene played a key role in determining expression of E7 oncoprotein in all tested cells. HPV16 E7 inhibited significantly expression of pRb to impair keratinocyte differentiation and disrupted development of skin epidermis in mice. HPV16 E7 increased substantially the number of G0/G1 cells associated with upregulation of cyclin D2 and downregulation of cyclin B1 in keratinocytes. HPV16 E7 not only inhibited expression of involucrin and alpha-spectrin but also disrupted the organization of involucrin filaments and spectrin cytoskeleton. Furthermore, HPV16 E7 inhibited expression of beta-adducin, destroyed its cytoskeletal structure and induced phosphorylation of beta-adducin((Ser662)) in keratinocytes. Importantly, HPV16 E7 induced carcinogenesis in mice associated with expression of phosphorylated beta-adducin((Ser662)) and its nucleus-translocation. In conclusion, we provided evidence that HPV16 E7 oncoprotein inhibited keratinocyte differentiation in vitro and in vivo leading to carcinogenesis through cell cycle arrest and disruption of pRb/involucrin/spectrin/adducin cascade.