The Epstein-Barr virus (EBV) contributes to the growth and survival of Hodgkin lymphoma (HL) cells. Here we report that down-regulation of the transforming growth factor-beta (TGF-beta) target gene, protein tyrosine phosphatase receptor kappa (PTPRK), followed EBV infection of HL cells and was also more frequently observed in the Hodgkin and Reed-Sternberg (HRS) cells of EBV-positive compared with EBV-negative primary HL. The viability and proliferation of EBV-positive HL cells was decreased by overexpression of PTPRK, but increased following the knockdown of PTPRK expression in EBV-negative HL cells, demonstrating that PTPRK is a functional tumor suppressor in HL. EBV suppressed the TGF-beta–mediated activation of PTPRK expression, suggesting disruption of TGF-beta signaling upstream of PTPRK. This was confirmed when we showed that the Epstein-Barr nuclear antigen-1 (EBNA1) decreased Smad2 protein levels and that this was responsible for PTPRK down-regulation. EBNA1 decreased the half-life of Smad2 but did not interact with Smad2. By down-regulating Smad2 protein expression, EBNA1 apparently disables TGF-beta signaling, which subsequently decreases transcription of the PTPRK tumor suppressor. We speculate that loss of the phosphatase function of PTPRK may activate as-yet-unidentified growth-promoting protein tyrosine kinases, which in turn contribute to the pathogenesis of EBV-positive HL.