The diagnosis of Epstein-Barr virus (EBV)-associated carcinomas is often heralded by high antibody titers to the viral replicative antigens, suggesting EBV reactivation may be a factor in tumor evolution. EBV DNA and nuclear antigen was detected in a newly diagnosed thymic carcinoma. Polymerase chain reaction analysis revealed the presence of a rearranged EBV DNA fragment, BamHI WZhet. This rearrangement is found in a defective EBV that up-regulates the BZLF1 (BamHI Z leftward reading frame) gene product in vitro and induces the EBV lytic cycle. Molecular analysis of the EBV termini demonstrated low levels of the lytic (linear) genomic configuration among a predominantly latent (episomal) population at diagnosis. The episomal populations were of uniform molecular weight at diagnosis and relapse, indicating clonal tumor expansion from a single EBV-infected progenitor. The presence within malignant epithelium of defective virus that can disrupt EBV latency, and perhaps cellular gene regulation, suggests a potential mechanism for EBV reactivation and concurrent malignant progression.