Kaposi's sarcoma-associated herpesvirus (KSHV) is causally associated with several malignant tumors: Kaposi's sarcoma (KS), multicentric Castleman's disease (MCD), and primary effusion lymphoma (PEL). KS remains the most common AIDS-related malignancy since the AIDS epidemic and thus has been extensively studied. KS is characterized as an angioproliferative disease with massive immune cell infiltration at the early stage. High levels of proinflammatory cytokines and growth factors are found in KS lesions, and their involvement in the survival and growth of tumor cells has been well characterized. However, little is known about the role of the inflammatory microenvironment in the regulation of KSHV gene expression and/or viral replication. In the present study, we demonstrated that IFN-γ and TNF-α profoundly inhibited KSHV progeny production in primary human lymphatic endothelial cells (LECs) as well as induced KSHV-producer cells (iSLK.219) with doxycycline. Of note, IFN-γ inhibited overall KSHV gene expression, while the effects of TNF-α were confined to a selected set of genes, which were also downregulated by IFN-γ. The addition of IFN-γ up to 36 hr after induction of viral lytic replication was effective in terms of the inhibition of infectious virion production, suggesting that its inhibitory effect is exerted at the early stages of KSHV life cycle. We believe these data have potentially important implications for rationalizing a therapeutic agent to treat KSHV-induced tumors in which lytic replication plays a critical role in their pathogenesis: KS and MCD.