The Epstein-Barr virus immediate-early protein, BZLF1 (Z), initiates the switch between latent and lytic infection and plays an essential role in mediating viral replication. Z also inhibits expression of the major receptor for tumor necrosis factor (TNF), TNFR1, thus repressing TNF cytokine signaling, but the mechanism for this effect is unknown. Here, we demonstrate that Z prevents both C/EBPα- and C/EBPβ-mediated activation of the TNFR1 promoter (TNFR1p) by interacting directly with both C/EBP family members. We show that Z interacts directly with C/EBPα and C/EBPβ in vivo and that a Z mutant altered at alanine residue 204 in the bZIP domain is impaired for the ability to interact with both C/EBP proteins. Furthermore, we find that the Z(A204D) mutant is attenuated in the ability to inhibit the TNFR1p but mediates lytic viral reactivation and replication in vitro in 293 cells as well as wild-type Z. Although Z does not bind directly to the TNFR1p in EMSA studies, chromatin immunoprecipitation studies indicate that Z is complexed with this promoter in vivo. The Z(A204D) mutant has reduced interaction with the TNFR1p in vivo but is similar to wild-type Z in its ability to complex with the IL-8 promoter. Finally, we show that the effect of Z on C/EBPα- and C/EBPβ-mediated activation is promoter dependent. These results indicate that Z modulates the effects of C/EBPα and C/EBPβ in a promoter-specific manner and that in some cases (including that of the TNFR1p), Z inhibits C/EBPα- and C/EBPβ-mediated activation.