BACKGROUND: Squamous cell carcinoma of the anal canal provides a model for studying the contribution of human papillomavirus (HPV) and human immunodeficiency virus (HIV) infection to the development of neoplasia. This paper reviews the existing literature relating to the molecular biology of anal squamous cell carcinoma and proposes a theory of pathogenesis. METHODS: A Medline literature search was performed to identify English articles on the pathogenesis of squamous cell carcinoma of the anus; further articles were obtained from the references quoted in the literature initially reviewed. RESULTS: HPV infection and subsequent HPV DNA integration are necessary, but not sufficient, to cause cancer progression. Loss of heterozygosity at 11q23 is the most consistent genomic change observed. Loss of heterozygosity at 17p, 18q and 5q is frequently observed in tumours of HIV-negative patients, but not in those of HIV-positive patients. Current data suggest that mutations in p53, DCC and APC tumour suppressor genes contribute to the stepwise progression of anal squamous cell carcinoma in immunocompetent individuals. CONCLUSION: In comparison with immunocompetent individuals, HIV-positive patients have persistent HPV infection in the anal canal. In this population, microsatellite instability, rather than chromosomal instability, appears to be a preferred pathway for rapid progression towards invasive carcinoma.