Kaposi's sarcoma-associated herpesvirus/human herpesvirus type-8 (KSHV/HHV-8) is associated with primary effusion lymphomas (PEL), a rare form of B-cell lymphoma. PEL cell lines infected with HHV-8, but negative for Epstein-Barr virus (EBV), were analyzed for their tumorigenic potential in a small animal model system. Inoculation of PEL cell lines into non-obese diabetic/severe combined immunodeficient (NOD/SCID) mice results in efficient engraftment and tumorigenesis in vivo. PEL-engrafted NOD/SCID (PEL/SCID) mice displayed malignant ascites development with notable abdominal distension, consistent with the clinical manifestations of PEL in humans. Azidothymidine (AZT, zidovudine) and interferon-alpha (IFN-alpha) induce apoptosis in HHV-8+/EBV- PEL cells in culture, by induction of a tumor necrosis factor-related apoptosis inducing ligand (TRAIL) mediated suicide program and has been proposed as a therapy for herpesvirus-associated lymphomas. Daily injection of AZT and IFN-alpha significantly increased mean survival time (MST) of PEL/SCID mice suggesting that induction of apoptosis in PEL cells in vivo may be exploited as an effective relatively non-toxic therapy targeting HHV-8 infected PEL. These data demonstrate that the PEL/SCID mouse is an important preclinical model to characterize efficacy and anti-tumor mechanisms of new therapeutic targets in vivo and will be useful in the design and testing of agents in viral lymphoproliferative diseases.