In this study we investigate the mechanism of intracellular pH change and its role in malignant transformation using the E7 oncogene of human papillomavirus type 16 (HPV16). Infecting NIH3T3 cells with recombinant retroviruses expressing the HPV16 E7 or a transformation deficient mutant we show that alkalinization is transformation specific. In NIH3T3 cells in which transformation can be turned on and followed by induction of the HPV16 E7 oncogene expression, we demonstrate that cytoplasmic alkalinization is an early event and was driven by stimulation of Na+/H+ exchanger activity via an increase in the affinity of the intracellular NHE-1 proton regulatory site. Annulment of the E7-induced cytoplasmic alkalinization by specific inhibition of the NHE-1, acidification of culture medium, or clamping the pHi to nontransformed levels prevented the development of later transformed phenotypes such as increased growth rate, serum-independent growth, anchorage-independent growth, and glycolytic metabolism. These findings were verified in human keratinocytes (HPKIA), the natural host of HPV. Results from both NIH3T3 and HPKIA cells show that alkalinization acts on pathways that are independent of the E2F-mediated transcriptional activation of cell cycle regulator genes. Moreover, we show that the transformation-dependent increase in proliferation is independent of the concomitant stimulation of glycolysis. Finally, treatment of nude mice with the specific inhibitor of NHE-1, DMA, delayed the development of HPV16-keratinocyte tumors. Our data confirm that activation of the NHE-1 and resulting cellular alkalinization is a key mechanism in oncogenic transformation and is necessary for the development and maintenance of the transformed phenotype.