Kaposi's sarcoma-associated herpesvirus (KSHV), or human herpesvirus 8, is associated with three proliferative diseases ranging from viral cytokine-induced hyperplasia to monoclonal neoplasia: multicentric Castleman's disease (CD), Kaposi's sarcoma (KS), and primary effusion lymphoma (PEL). Here we report a new latency-associated 1,704-bp KSHV spliced gene belonging to a cluster of KSHV sequences having homology to the interferon regulatory factor (IRF) family of transcription factors. ORFK10.5 encodes a protein, latency-associated nuclear antigen 2 (LANA2), which is expressed in KSHV-infected hematopoietic tissues, including PEL and CD but not KS lesions. LANA2 is abundantly expressed in the nuclei of cultured KSHV-infected B cells. Transcription of K10.5 in PEL cell cultures is not inhibited by DNA polymerase inhibitors nor significantly induced by phorbol ester treatment. Unlike LANA1, LANA2 does not elicit a serologic response from patients with KS, PEL, or CD as measured by Western blot hybridization. Both KSHV vIRF1 (ORFK9) and LANA2 (ORFK10.5) appear to have arisen through gene duplication of a captured cellular IRF gene. LANA2 is a potent inhibitor of p53-induced transcription in reporter assays. LANA2 antagonizes apoptosis due to p53 overexpression in p53-null SAOS-2 cells and apoptosis due to doxorubicin treatment of wild-type p53 U2OS cells. While LANA2 specifically interacts with amino acids 290 to 393 of p53 in glutathione S-transferase pull-down assays, we were unable to demonstrate LANA2-p53 interaction in vivo by immunoprecipitation. These findings show that KSHV has tissue-specific latent gene expression programs and identify a new latent protein which may contribute to KSHV tumorigenesis in hematopoietic tissues via p53 inhibition.