Cervical carcinoma, the second leading cause of cancer deaths in women worldwide, is associated with human papillomavirus (HPV). HPV-infected individuals are at high risk for developing cervical carcinoma; however, the molecular mechanisms that lead to the progression of cervical cancer have not been established. We hypothesized that in a multistep carcinogenesis model, HPV provides the initial hit and activation of canonical Wnt pathway may serve as the second hit. To test this hypothesis, we evaluated the canonical Wnt pathway as a promoting factor of HPV-induced human keratinocyte transformation. In this in vitro experimental cervical carcinoma model, primary human keratinocytes immortalized by HPV were transformed by SV40 small-t (smt) antigen. We show that smt-transformed cells have high cytoplasmic beta-catenin levels, a hallmark of activated canonical Wnt pathway, and that activation of this pathway by smt is mediated through its interaction with protein phosphatase-2A. Furthermore, inhibition of downstream signaling from beta-catenin inhibited the smt-induced transformed phenotype. Wnt pathway activation transformed HPV-immortalized primary human keratinocytes even in the absence of smt. However, activation of the Wnt pathway in the absence of HPV was not sufficient to induce transformation. We also detected increased cytoplasmic and nuclear staining of beta-catenin in invasive cervical carcinoma samples from 48 patients. We detected weak cytoplasmic and no nuclear staining of beta-catenin in 18 cases of cervical dysplasia. Our results suggest that the transformation of HPV expressing human keratinocytes requires activation of the Wnt pathway and that this activation may serve as a screening tool in HPV-positive populations to detect malignant progression.