Induction of Epstein-Barr virus (EBV) production in an EBV-positive cell is achieved by expression of the gene BZLF1 that switches the latent state into a lytic state. The expression of the BZLF1 gene is initiated from the promoter Zp, which is normally suppressed in EBV-transformed B cells. The BZLF1 gene can be induced for expression by activating agents, such as transforming growth factor-beta (TGF-beta) and 12-O-tetradecanoylphorbol-13-acetate. The 12-O-tetradecanoylphorbol-13-acetate-responsive element located in the Zp is the AP-1 motif. The TGF-beta-responsive element, however, has not been determined. We demonstrated that the Smad4-binding element site, GTCTG, from -233 to -229, was located in the regulatory region of the Zp relative to the BZLF1 transcription initiation site and was physically associated with Smad4. This association was important for the TGF-beta induction of Zp. We also showed from the results of co-transfection experiments and electrophoretic mobility shift assays that both the AP-1 motif and Smad4-binding element site appeared to be required for the TGF-beta-induced activation of Zp. This effect was mediated through the cooperation of Smad3/Smad4 and c-Jun/c-Fos that formed a complex. TGF-beta treatment of Rael cells induced production of infectious EBV particles that was capable of infecting EBV-negative CA46 cells and transforming normal cord blood B cells, in vitro. Those data support a mechanism that TGF-beta induces the latent EBV in cells to enter the viral lytic cycle through regulation of key viral proteins by TGF-beta signal transducers. Those findings also suggest a role of TGF-beta in EBV-associated diseases.