Kaposi’s sarcoma-associated herpesvirus (KSHV) is believed to be the causative agent of Kaposi’s sarcoma (KS), a multicentric growth factor-dependent tumor common in AIDS patients characterized histopathologically by spindle cell proliferation, angiogenesis, and leukocyte infiltration. Recently, open reading frame 74 of KSHV has been implicated as a major viral determinant of KS. Open reading frame 74 encodes KSHV G protein-coupled receptor (GPCR), a constitutively active chemokine receptor that directly transforms NIH 3T3 cells in vitro and induces multifocal KS-like lesions in KSHV-GPCR-transgenic mice. Interestingly, receptor-positive cells are very rare in lesions from these mice, implicating an indirect mechanism of tumorigenesis. In this regard, here we report that expression of KSHV-GPCR in transfected epithelial, monocytic, and T cell lines induced constitutive activation of the immunoregulatory transcription factors AP-1 and NF-κB. This was associated with constitutive induction of the proinflammatory NF-κB-dependent cytokines IL-1β, IL-6, and TNF-α, and chemokines monocyte chemoattractant protein-1 and IL-8, as well as the AP-1-dependent basic fibroblast growth factor. In addition, IL-2 and IL-4 production was induced in transfected Jurkat T cells. Truncation of the final five amino acids in the cytoplasmic tail of KSHV-GPCR caused complete loss of its transforming and NF-κB-inducing activities, without affecting receptor expression or ligand binding. These data suggest that KS results in part from KSHV-GPCR induction of proinflammatory cytokine and growth factor gene expression, mediated by a signaling determinant within the last five amino acids of the C terminus, a domain that is also critical for direct cell transformation.