Kaposi's sarcoma-associated herpesvirus has been linked to Kaposi's sarcoma, body cavity-based lymphoma, and Castleman's disease. The Kaposi's sarcoma-associated herpesvirus genome contains a cluster of open reading frames encoding proteins (vIRFs) with homology to the cellular transcription factors of the interferon regulatory factor family. vIRF-3, also called LANA2, is a latently expressed nuclear protein. Here we demonstrate that vIRF-3 directly interacts with cellular interferon regulatory factor (IRF) IRF-3, IRF-7, and the transcriptional co-activator CBP/p300. The mapping of the vIRF-3 binding domain revealed that vIRF-3 associates with both IRF-3 and IRF-7 through its C-terminal region. The p300 domain, which interacts with vIRF-3, is distinct from the previously identified IBiD domain, to which both vIRF-1 and IRF-3 bind. Thus, in contrast to vIRF-1, vIRF-3 neither blocks the interaction between IRF-3 and p300 nor inhibits the histone acetylation. Although vIRF-3 is not a DNA-binding protein, it is recruited to the IFNA promoters via its interaction with IRF-3 and IRF-7. The presence of vIRF-3 in the enhanceosome assembled on the IFNA promoters increases binding of IRF-3, IRF-7, and acetylated histone H3 to this promoter region. Consequently, vIRF-3 stimulates the IRF-3- and IRF-7-mediated activation of type I interferon (IFNA and IFNB) genes and the synthesis of biologically active type I interferons in infected B cells. These studies illustrate that vIRF-3 and vIRF-1 have clearly distinct functions. In addition to its co-repressor activity, vIRF-3 can also act as a transcriptional activator on genes controlled by cellular IRF-3 and IRF-7.