Kaposi's sarcoma-associated herpesvirus (KSHV) is the causative agent of three human proliferative disorders, namely, Kaposi's sarcoma, primary effusion lymphomas (PEL), and multicentric Castleman's disease. Lytic DNA replication of KSHV, which is essential for viral propagation, requires the binding of at least two KSHV proteins, replication and transactivation activator (RTA) and K-bZIP, on the lytic origin of replication. Moreover, K-bZIP physically interacts with RTA and represses its transactivation activity on several viral promoters in transient transfection assays. To evaluate the physiological roles of K-bZIP in the context of PEL, we generated BCBL-1 cells with a tetracycline (Tet)-inducible small hairpin RNA (shRNA) directed against the K8 mRNA to knock down K-bZIP expression at different points during KSHV's life cycle. Using this model, we demonstrate that in the absence of K-bZIP expression, dramatic decreases in orf50, orf57, and orf26 transcript expression are observed. Similar effects were seen at the protein level for RTA (immediate-early protein) and K8.1 (late protein) expression. Interestingly, a direct correlation between K-bZIP levels and viral lytic mRNAs was noticed. As a consequence of K-bZIP knockdown, viral DNA replication and virion production were severely impaired. The same effects were observed following knockdown of K-bZIP in another PEL cell line, BC3. Finally, using shRNA-K8-inducible 293 cells, we report that de novo synthesis of K-bZIP is not necessary for initiation of infection and latency establishment. These data support the concept that K-bZIP is essential for lytic viral gene expression, viral DNA replication, and virus propagation in PEL cells.