Papillomavirus DNA persists in infected cells as a nuclear plasmid, causing epithelial lesions in many hosts, including humans. The viral protein E2 is required for both replication and transcription to facilitate this persistence. Bovine papillomavirus E2 protein is phosphorylated at two predominant sites. Phosphorylation of one of these sites (serine 301) inhibits replication of the genome. Using mass spectrometry and Edman sequencing, we have mapped additional phosphorylation sites in tryptic peptides to positions which lie primarily in the putatively unstructured hinge region of E2. Mutation of the major sites facilitates transformation in the absence of viral repressors and only has a minor effect on transformation when the repressors are present. Mutation of the major phosphorylation sites combined with one additional change at a newly discovered site (serine 235) blocks transformation. Transformation can be restored by mutating this residue to aspartic acid, mimicking a phosphorylated amino acid, suggesting that phosphorylation is key to the regulation. Transformation by the mutant genome can also be rescued by ectopic expression of the E2 enhancer protein, demonstrating a loss of function by the mutant protein and not a toxic defect. In transient assays, phosphorylation site mutants of E2 protein were normal for all viral functions tested, including replication, transcriptional activation and repression (by the overlapping mutant repressors), protein accumulation, and surprisingly, viral oncogene E5 promoter activation. While the mutant genome transiently replicated to high levels, stable replication was defective, suggesting that a function of E2 required for plasmid retention is regulated by phosphorylation.