The Epstein-Barr virus nuclear leader protein LP (EBNALP) and EBNA2 are expressed first in lymphocyte infection, coordinately regulate cell and viral gene transcription, and are critical for lymphocyte outgrowth into lymphoblastoid cell lines (LCLs). We have now found that EBNALP readily associated with EBNA2 or with the EBNA2 C-terminal acidic activation domain (E2AD) when both components were expressed by bacteria. In lymphoblasts, EBNALP and EBNA2 did not stably associate. However, EBNALP deleted for only 10 C-terminal amino acids stably associated with EBNA2 in lymphoblasts or with EBNA2 acidic activating domain from bacteria. The E2AD was essential for EBNALP coactivation of the latent membrane protein 1 promoter in lymphoblasts; EBNALP could coactivate with a deficient mutant EBNA2, EBNA2W(454)T, but not with EBNA2 deleted for E2AD. Moreover, EBNALP 31 amino acids (dW2Y1) with 24 C- or N-terminal amino acids was a specific and efficient affinity matrix for EBNA2 or EBNALP. Even an EBNALP 22-aa peptide, dW2, specifically bound EBNALP or EBNA2. These biochemical interactions between EBNALP and EBNA2 enable coordinated transcriptional regulation of cell and viral gene expression in lymphoblasts only when the interaction is unstable; deletion of the EBNALP C-terminal 10 aa stabilized association with EBNA2 and prevented coactivation. Because EBNALPd10 dominantly inhibited EBNALP coactivation with EBNA2, EBNALPd10 expression in LCLs may be useful in assessing the role of EBNALP coactivation in LCL growth or survival.