Kaposi's sarcoma-associated herpes virus (KSHV) is a recently identified human gamma2-herpesvirus associated with Kaposi's sarcoma, primary effusion lymphoma, and Castleman's disease. We reasoned that CTL responses may provide host defense against this virus, and consequently, KSHV may have evolved strategies to evade the CTL-mediated immune surveillance. In this study six B cell lines latently infected with KSHV were found to express reduced levels of HLA class I surface molecules compared with B cell lines transformed by the related gamma-herpesvirus EBV. KSHV-infected cells also required higher concentrations of soluble peptides to induce efficient CTL-mediated lysis than control cell lines and were unable to process and/or present intracellularly expressed Ag. Incubation of the KSHV-infected cell lines with high concentrations of soluble HLA class I binding peptides did not restore the deficient HLA class I surface expression. To assess the underlying mechanisms of these phenomena, TAP-1 and TAP-2 gene expression was analyzed. While no attenuation in TAP-2 expression was observed, TAP-1 expression was significantly reduced in all KSHV cell lines compared with that in controls. These results indicate that KSHV can modulate HLA class I-restricted Ag presentation to CTL, which may allow latently infected cells to escape CTL recognition and persist in the infected host.