Papillomaviruses play an important role in human cancer development, and have been isolated from a number of animal malignancies. However, the association of papillomaviruses with tumors has been poorly investigated in sheep. In this study, a novel ovine Papillomavirus, OaPV3, was cloned from sheep squamous cell carcinoma. Unlike the already known ovine papillomaviruses, belonging to the Delta genus, OaPV3 lacks the E5 open reading frame and maintains the conserved retinoblastoma motif in the E7 gene. OaPV3 infects exclusively epithelial cells, and was found in skin of healthy sheep of geographically separated flocks located in Sardinia (Italy). This new virus is transcriptionally active in tumors and shares low homology with all the other papillomaviruses, establishing a new genus. Taken together, the co-occurrence of OaPV3 and tumors, its cell and tissue tropism, and its gene repertoire, suggests a role for this virus in development of sheep squamous cell carcinoma.