Kaposi's sarcoma (KS) is a complex proliferative lesion long suspected of being dependent on exogenous paracrine signaling molecules to stimulate its proliferative, angiogenic, and inflammatory components. In particular, both clinical and experimental observations have pointed to a potential role for inflammatory cytokines as permissive factors for KS development, but KS pathogenesis is also critically dependent on infection by an exogenous herpesvirus, the KS-associated herpesvirus (KSHV). To examine the possible links between inflammatory cytokines and KSHV replication, we tested for the ability of such cytokines to induce lytic viral reactivation in the latently infected BCBL-1 cell line. Interferon-γ consistently activated KSHV replication, whereas tumor necrosis factor, interleukin-1, interleukin-2, interleukin-6, granulocyte-macrophage colony stimulating factor, and basic fibroblast growth factor did not. Glucocorticoids also failed to induce lytic KSHV growth in these cells, but ionomycin, a calcium ionophore, induced replication and strongly augmented the known inductive effects of phorbol esters. Interferon-α had a dose-dependent inhibitory effect on KSHV induction by ionomycin. The identification of interferon-γ as an activator and interferon-α as an inhibitor of KSHV induction in vitro correlates well with in vivo observations and demonstrates for the first time that inflammatory cytokines can directly modulate KSHV replication.