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The etiological role of infection with Human papillomavirus type 16 (HPV16) in cervical cancer is well established. HPV16 variants, classified based on less than 10% nucleotide variations in the major capsid (L1 ORF) are known to contribute to persistent infection leading to cancer development. L1 protein forms the cornerstone of HPV structure and antigenicity. In the present study, HPV16 L1 variants were characterized by cervical lesion grade and variations in sequences were correlated to structure and function. The L1 gene was analyzed in 152 HPV16 positive cervical samples obtained from Indian women using polymerase chain reaction‐directed sequencing. Phylogenetic analysis was carried out for lineage typing. Sixty‐one SNPs were detected in L1 genes resulting in 20 nonsynonymous amino acid substitutions of which N56T, N92T, L158F, V178G, N181I, K236T, K443Q, K454T, and K475R are reported in Indian isolates for the first time. The substitutions N181T, T353P, and T389S were significantly associated with high‐grade cervical disease. The predominance of lineage A (A1‐A4, 84.96%) was observed among the isolates, while the D3 sublineage showed significant association with high‐grade cervical lesions. No evidence for recombination and the positive selection was obtained. These substitutions, when mapped on three‐dimensional structure, revealed that 11 and 4 substitutions are part of experimentally validated B‐ and T‐cell epitopes, of which T266A and N285T were common to both types of epitopes and may impact HPV vaccine efficacy. The variants identified through this study have the potential to serve as translational leads for designing diagnostic probes and vaccines. Highlights: HPV16 is a causative agent of cervical cancer and substitutions in the major capsid protein L1, may lead to antigenic variation and altered disease severity. Sequencing of L1 gene from l52 HPV16 isolates sampled from Indian women revealed predominance of lineage A. However, D3 sub‐lineage showed significant association with high‐grade cervical disease status. The substitutions N181T, T353P, T389S are associated with high‐grade cervical disease status are likely to impact vaccine efficacy. [ABSTRACT FROM AUTHOR]