Upon viral infection, the major defense mounted by the host immune system is activation of the interferon (IFN)-mediated antiviral pathway. In order to complete their life cycles, viruses must modulate the host IFN-mediated immune response. The K3 and K5 proteins of a human tumor-inducing herpesvirus, Kaposi's sarcoma-associated herpesvirus (KSHV), have been shown to downregulate the surface expression of host immune modulatory receptors by increasing their endocytosis rates, which leads to suppression of cell-mediated immunity. In this report, we demonstrate that K3 and K5 both specifically target gamma interferon receptor 1 (IFN-γR1) and induce its ubiquitination, endocytosis, and degradation, resulting in downregulation of IFN-γR1 surface expression and, thereby, inhibition of IFN-γ action. Mutational analysis indicated that K5 appeared to downregulate IFN-γR1 more strongly than K3 and that the amino-terminal ring finger motif and the carboxyl-terminal region of K5 were necessary for IFN-γR1 downregulation. These results suggest that KSHV K3 and K5 suppress both cytokine-mediated and cell-mediated immunity, which ensures efficient viral avoidance of host immune controls.