Kaposi's sarcoma-associated herpesvirus (KSHV) is associated with Kaposi's sarcoma, primary effusion lymphoma, and multicentric Castleman's disease. The latency-associated nuclear antigen (LANA) is a multifunctional protein that is consistently expressed in all KSHV-associated malignancies. LANA interacts with a variety of cellular proteins, including the transcriptional cosuppressor complex mSin3 and the tumor suppressors p53 and Rb, thereby regulating viral and cellular gene expression. In addition, LANA is required for maintenance of the episomal viral DNA during latency in dividing cells. Colocalization studies suggest that LANA tethers the viral genome to chromosomes during mitosis. In support of this model, a specific LANA- binding site has recently been identified within the terminal repeat unit, and a chromatin interaction domain was mapped to a short amino acid stretch within the N-terminal domain of LANA. Epstein-Barr virus nuclear antigen 1 (EBNA-1), a functional homologue of LANA, is also required for genome segregation; in addition, EBNA-1 also supports efficient DNA replication of oriP-containing plasmids. By performing short-term replication assays, we demonstrate here for the first time that de novo synthesis of terminal-repeat (TR)-containing plasmids is highly dependent on the presence of LANA. We map the required cis-acting sequences within the TR to a 79-bp region and demonstrate that the DNA-binding domain of LANA is required for this DNA replication activity. Surprisingly, the 233-amino-acid C domain of LANA by itself partially supports replication. Our data show that LANA is a sequence-specific DNA-binding protein that, like EBNA-1, plays an important role in DNA replication and genome segregation. In addition, we show that all necessary cis elements for the origin of replication (ori) function are located within a single TR, suggesting that the putative ori of KSHV is different from those of other gammaherpesviruses, which all contain ori sequences within the unique long sequence outside of their TR. This notion is further strengthened by the unique modular structure of the KSHV TR element.