Kaposi's sarcoma-associated herpesvirus (KSHV), like other herpesviruses, has two stages to its life cycle: latency and lytic replication. KSHV is required for development of Kaposi's sarcoma, a tumor of endothelial origin, and is associated with the B-cell tumor primary effusion lymphoma (PEL) and the plasmablastic variant of multicentric Castleman's disease, all of which are characterized by predominantly latent KSHV infection. Recently, we and others have shown that the activated form of transcription factor X-box binding protein 1 (XBP-1) is a physiological trigger of KSHV lytic reactivation in PEL. Here, we show that XBP-1s transactivates the ORF50/RTA promoter though an ACGT core containing the XBP-1 response element, an element previously identified as a weakly active hypoxia response element (HRE). Hypoxia induces the KSHV lytic cycle, and active HREs that respond to hypoxia-inducible factor 1alpha are present in the ORF50/RTA promoter. Hypoxia also induces active XBP-1s, and here, we show that both transcription factors contribute to the induction of RTA expression, leading to the production of infectious KSHV under hypoxic conditions.