The three-dimensional structure of chromatin organized by genomic loops facilitates RNA polymerase II access to distal promoters. The Kaposi's sarcoma-associated herpesvirus (KSHV) lytic transcriptional program is initiated by a single viral transactivator, K-Rta. Here we report the KSHV genomic structure and its relationship with K-Rta recruitment sites using Capture Hi-C analyses. High-resolution 3D viral genomic maps identify a number of direct physical, long-range, and dynamic genomic interactions. Mutant KSHV chromosomes harboring point mutations in the K-Rta responsive elements (RE) significantly attenuate not only the directly proximate downstream gene, but also distal gene expression in a domain-specific manner. Genomic loops increase in the presence of K-Rta, while abrogation of K-Rta binding impairs the formation of inducible genomic loops, decreases the expression of genes networked through the looping, and diminishes KSHV replication. Our study demonstrates that genomic architectural dynamics plays an essential role in herpesvirus gene expression.