The papillomavirus E2 protein regulates transcription, replication, and nuclear retention of viral genomes. Phosphorylation of E2 in the hinge region has been suggested to modulate protein stability, DNA-binding activity, and chromosomal attachment. The papillomavirus E8^E2 protein shares the hinge domain with E2 and acts as a repressor of viral replication. Mass spectrometry analyses of human papillomavirus 31 (HPV31) E8^E2 and E2 proteins identify phosphorylated S78, S81, and S100 in E8^E2 and S266 and S269 in E2 in their hinge regions. Phos-tag analyses of wild-type and mutant proteins indicate that S78 is a major phosphorylation site in E8^E2, but the corresponding S266 in E2 is not. Phosphorylation at S78 regulates E8^E2's repression activity of reporter constructs, whereas the corresponding E2 mutants do not display a phenotype. Phosphorylation at S78 does not alter E8^E2's protein stability, nuclear localization, or binding to DNA or to cellular NCoR/SMRT complexes. Surprisingly, in the context of HPV31 genomes, mutation of E8^E2 S78 does not modulate viral replication or transcription in undifferentiated or differentiated cells. However, comparative transcriptome analyses of differentiated HPV31 E8^E2 S78A and S78E cell lines reveal that the expression of a small number of cellular genes is changed. Validation experiments suggest that the transcription of the cellular LYPD2 gene is altered in a phospho-S78 E8^E2-dependent manner. In summary, our data suggest that phosphorylation of S78 in E8^E2 regulates its repression activity by a novel mechanism, and this seems to be important for the modulation of host cell gene expression but not viral replication. Posttranslational modification of viral proteins is a common feature to modulate their activities. Phosphorylation of serine residues S298 and S301 in the hinge region of the bovine papillomavirus type 1 E2 protein has been shown to restrict viral replication. The papillomavirus E8^E2 protein shares the hinge domain with E2 and acts as a repressor of viral replication. A large fraction of HPV31 E8^E2 is phosphorylated at S78 in the hinge region, and this is important for E8^E2's repression activity. Surprisingly, phosphorylation at S78 in E8^E2 has no impact on viral replication in tissue culture but rather seems to modulate the expression of a small number of cellular genes. This may indicate that phosphorylation of viral transcription factors serves to broaden their target gene specificity.