In order to study the role of DNA damage processing in the development of cutaneous squamous cell carcinoma (SCC), we assessed the ability of six keratinocyte cell lines from a multistage-tumor progression model to repair three types of DNA damage: pyrimidine dimers, oxidative DNA lesions and DNA double strand breaks (DSB). The model comprised the spontaneously immortalized, non-tumorigenic human keratinocyte cell line HaCaT, four different c-Ha-ras transfectants of HaCaT (non-, benign- and two malignant-tumorigenic) and a SCC-derived cell line. Host cell reactivation assays with UVB-treated plasmid vectors pRSVcat showed no significantly altered repair of UVB-induced pyrimidine dimers in the tumorigenic cell lines, compared with the non-tumorigenic lines. Using the singlet oxygen-treated plasmids pRSVcat the Ha-ras-HaCaT-clones and the SCC-cells, exerted a DNA repair efficiency that was not significantly different from HaCaT cells. In order to assess the ability of the cells to ligate free DNA ends (repair of DSB), we used a plasmid shuttle vector assay with linearized plasmid pZ189. We found a significant increase of DNA end joining ability in the non-tumorigenic, the benign and in one of the malignant HaCaT-clones II-4. The malignant HaCaT-clone II-3, however, exerted a significantly lower rate of rejoining the linearized plasmid. This cell line also showed a highly and significantly elevated rate of micronuclei, which reflects a pronounced chromosomal instability. The SCC-cells exhibited a more efficient repair of DNA DSB than the HaCaT cells. We conclude that in the examined model, progression of human keratinocytes from the non-tumorigenic to the highly tumorigenic phenotype, is not accompanied by a decrease in the cell's capacity to repair UVB- and singlet oxygen-induced DNA lesions. However, an acquired deficiency in repairing DNA double strand breaks can be one mechanism promoting progression towards malignancy, possibly through impairing chromosomal stability.