We have shown that expression of Human Papillomavirus type 16 E7 (HPV16.E7) protein within epithelial cells, as occurs in HPV associated-premalignancy and cancers, results in local immune suppression, and a weak and ineffective immune response to E7 protein. However, a robust acute inflammatory stimulus can overcome this to enable immune elimination of HPV16.E7 transformed epithelial cells. 2,4-Dinitrochlorobenzene (DNCB) can elicit acute inflammation and has been shown to initiate the regression of HPV-associated genital warts. Although clinical use of DNCB is discouraged due to its mutagenic potential, understanding how DNCB induced acute inflammation alters local HPV16.E7 mediated-immune suppression might lead to better treatments. Here, we show that topical DNCB application to skin expressing HPV16.E7 as a transgene induces a hyperinflammatory response, not seen in non-transgenic control animals. The E7 associated-inflammatory response is characterized by enhanced expression of Th2 cytokines and increased infiltration of CD11b+Gr1intF4/80+Ly6ChiLy6Glow myeloid cells, producing arginase-1. Inhibition of arginase with an arginase specific inhibitor, N(omega)-hydroxy-nor-L-arginine, ameliorates the DNCB-induced inflammatory response. Our results demonstrate that HPV16.E7 protein enhances DNCB associated-production of arginase-1 by myeloid cells and consequent inflammatory cellular infiltration of skin.