Epstein-Barr virus (EBV) open reading frame BILF1 encodes a seven trans-membrane (TM) G protein-coupled receptor that signals with high constitutive activity through Galpha(i) (Beisser et al., 2005; Paulsen et al., 2005). In this paper, the transforming potential of BILF1 is investigated in vitro in a foci formation assay using retrovirally transduced NIH3T3 cells, as well as in vivo by using nude mice. BILF1 revealed a substantial transforming potential that was dependent on constitutive signaling, as a signaling-deficient mutant completely lost its ability to transform cells in vitro, and an intermediately active triple-mutated receptor possessed an intermediate transforming potential. Furthermore, BILF1 expression induced vascular endothelial growth factor secretion in a constitutively active manner. In nude mice, BILF1 promoted tumor formation in 90% of cases, ORF74 (from Kaposi's sarcoma-associated herpes virus) in 100% of cases, whereas the signaling-deficient receptor resulted in tumor establishment in 40% of cases. These data suggest that BILF1, when expressed during EBV infection, could indeed be involved in the pathogenesis of EBV-associated diseases and malignancies. Furthermore, the correlation between receptor activity and the ability to mediate cell transformation in vitro and tumor formation in vivo supports the idea that inverse agonists for BILF1 could inhibit cell transformation and be relevant therapeutic candidates.