High-risk human papillomaviruses (HPVs), especially HPV-16, play a primary role in the pathogenesis of cervical cancer. HPV-16 encodes the E5, E6 and E7 oncoproteins. Although the biological functions of E5 are poorly understood, recent studies indicate that its expression correlates with papillomavirus oncogenicity. In this study we demonstrate that the HPV-16 E5 oncoprotein increases plasma membrane expression of caveolin-1, which is a constituent of lipid rafts and regulator of cell signaling, and that this phenotype is mediated by the C-terminal 10 amino acids of E5. Moreover, E5 (but not mutant E5) induces a 23- to 40-fold increase in the lipid raft component, ganglioside GM1, on the cell surface and mediates a dramatic increase in caveolin-1/GM1 association. Since gangliosides strongly inhibit cytotoxic T lymphocytes, block immune synapse formation and are expressed at high levels on the surface of many tumor cells, our results suggest a potential mechanism for immune evasion by the papillomaviruses. Additionally, surface gangliosides are known to enhance proliferative signaling by the epidermal growth factor (EGF) receptor, providing a possible mechanistic basis for observations that EGF signaling is enhanced in E5-expressing cells. Finally, the upregulation of caveolin-1 and ganglioside GM1 at the plasma membrane of E5-expressing cervical cells provides potential new therapeutic targets and diagnostic markers for high-risk HPV infections.