The most abundantly expressed latent transcripts encoded by the Kaposi’s sarcoma (KS)-associated herpesvirus derive from the genomic region surrounding open reading frame (ORF) K12 (kaposin A). Here we show that these transcripts, initially described as limited to ORF K12 itself, more frequently encompass upstream sequences spanning two sets of 23-nucleotide GC-rich direct repeats (DRs) (DR1 and DR2). Although the DRs lack AUG codons and were previously presumed to be noncoding, a monoclonal antibody raised to infected cells detected multiple polypeptides encoded by this region. These proteins are expressed during latency and upon induction of lytic viral replication in both primary effusion lymphoma (PEL) cell lines and KS tumors. Biochemical and genetic analyses reveal that these proteins are derived from variant translational initiation at CUG codons. The predominant translation product in the PEL cell line BCBL-1 derives from the 5′-most CUG codon in the transcript, resulting in a protein (termed kaposin B) which is encoded largely by the repeats themselves and which does not include K12 sequences. Other non-AUG codons in alternate reading frames are also used at lower efficiency, including one that initiates translation of a DR-K12 fusion protein (kaposin C) that is predicted to sort to a different subcellular locale than kaposin B. Thus, the products of the K12 region, which is the most abundantly transcribed region in latency, are surprisingly complex and may encompass multiple biological functions.