Koi herpesvirus (KHV) (species Cyprinid herpesvirus 3) ORF134 was shown to transcribe a spliced transcript encoding a 179-amino-acid (aa) interleukin-10 (IL-10) homolog (khvIL-10) in koi fin (KF-1) cells. Pairwise sequence alignment indicated that the expressed product shares 25% identity with carp IL-10, 22 to 24% identity with mammalian (including primate) IL-10s, and 19.1% identity with European eel herpesvirus IL-10 (ahvIL-10). In phylogenetic analyses, khvIL-10 fell in a divergent position from all host IL-10 sequences, indicating extensive structural divergence following capture from the host. In KHV-infected fish, khvIL-10 transcripts were observed to be highly expressed during the acute and reactivation phases but to be expressed at very low levels during low-temperature-induced persistence. Similarly, KHV early (helicase [Hel] and DNA polymerase [DNAP]) and late (intercapsomeric triplex protein [ITP] and major capsid protein [MCP]) genes were also expressed at high levels during the acute and reactivation phases, but only low-level expression of the ITP gene was detected during the persistent phase. Injection of khvIL-10 mRNA into zebrafish (Danio rerio) embryos increased the number of lysozyme-positive cells to a similar degree as zebrafish IL-10. Downregulation of the IL-10 receptor long chain (IL-10R1) using a specific morpholino abrogated the response to both khvIL-10 and zebrafish IL-10 transcripts, indicating that, despite the structural divergence, khvIL-10 functions via this receptor. This is the first report describing the characteristics of a functional viral IL-10 gene in the Alloherpesviridae.