The effect of Epstein-Barr virus (EBV) SM protein on EBV gene expression was examined using a recombinant EBV strain with the SM gene deleted and DNA microarrays representing all known EBV coding regions. Induction of lytic EBV replication in the absence of SM led to expression of approximately 40% of EBV genes, but a block in expression of over 50% of EBV genes. Contrary to previous findings, several early genes were SM dependent, and lytic EBV DNA replication did not occur in the absence of SM. Notably, two genes essential for lytic EBV DNA replication, BSLF1 and BALF5, encoding EBV DNA primase and polymerase, respectively, were SM dependent. Lytic DNA replication was partially rescued by ectopic expression of EBV primase and polymerase, but virion production was not. Rescue of DNA replication only enhanced expression of a subset of late genes, consistent with a direct requirement for SM for late gene expression in addition to its contribution to DNA replication. Therefore, while SM is essential for most late gene expression, the proximate block to virion production by the EBV SM deletion strain is an inability to replicate linear DNA. The block to DNA replication combined with the direct effect of SM on late gene expression leads to a global deficiency of late gene expression. SM also inhibited BHRF1 expression during productive replication in comparison to that of cells induced into lytic replication in the absence of SM. Thus, SM plays a role in multiple steps of lytic cycle EBV gene expression and that it is transcript-specific in both activation and repression functions.